How To Start A Cleaning Business (Plus, Everything You Need To Get Up & Running)
Entropy is a powerful force. If there’s one thing you can rely on, it’s that everything gets dirty sooner or later. If it doesn’t get dirty, it gets cluttered. Add in the increasing prevalence of two-income households, the pace of modern work, and long commutes, and it’s not surprising that more and more people are letting their chores slide. And that’s not even taking into consideration the huge messes businesses make. The fields are ripe for the harvest — why not cut yourself a piece of the action and start a cleaning business?
Luckily, the overhead costs of starting a cleaning business are fairly low (at least up until you begin adding staff members). Still, you’ll want to have a good sense of what you’re getting into before you dive into the cleaning industry. It’s vital to have a plan to tackle the expenses and challenges you’ll encounter along the way.
Not sure where to start? We’ll break starting and funding a cleaning business into a step-by-step process below.
Table of Contents
- Why Start A Cleaning Business?
- Should You Start A House Cleaning Or Office Cleaning Business? It’s Time To Pick A Niche
- Why You Need To Make A Cleaning Service Business Plan
- Funding Your Cleaning Business’s Startup Costs
- Where To Get A Cleaning Business License & Insurance
- How To Set Rates For Your Cleaning Company
- Choosing Business Software & A Payment Processor For Your Cleaning Service
- Supplies & Equipment For Opening A Cleaning Business
- Where To Find Your First Cleaning Job (& How To Keep Clients)
- Marketing Your New Cleaning Business
- The Essential Checklist For Starting A Cleaning Business
- Got Everything You Need For Starting A Cleaning Service? Get Out There & Get Going!
Why Start A Cleaning Business?
Before we get into funding options, insurance, licenses, and other specifics, let’s start with the basics, such as why you should start a cleaning business.
One of the biggest benefits of starting a cleaning business is that there are relatively low startup costs. Since you’ll be traveling to other locations, you won’t need to rent office space at first, although you may choose to do so as your business grows. A cleaning business doesn’t require you to purchase large, expensive equipment right off the bat. Cleaning supplies, a vacuum cleaner, mops, and other smaller items are all you need to get started. While you may certainly choose to invest in more expensive equipment in the future (e.g., a work vehicle or a floor cleaning machine), you can use your own personal vehicle and a few key cleaning items when you first launch your business. We’ll go into more detail about supplies and equipment later on in this post.
Starting your own cleaning business also doesn’t require a specific skill set, a college degree, or special certifications. That doesn’t mean it’s easy, though. You do need to have a good work ethic, attention to detail, and the willingness to put in the physical labor required to get the job done right.
There will always be a need for cleaning services, so there is a very real possibility that you can launch and grow a successful and lucrative cleaning business. To give you an idea of the future outlook for the industry, the Bureau of Labor has projected that the commercial cleaning and maintenance industry will grow 6.6% in the 10-year period between 2014 and 2024. As far as residential cleaning, busier lifestyles leave less time for cleaning, with many households opting to hire a professional cleaning company.
While a potential recession as a result of the COVID-19 pandemic may have an impact on the industry, increased sanitation and cleaning measures may open up even more opportunities for professional cleaning businesses. The combination of viability, low startup costs, and no educational or special skill requirements makes a cleaning business a great choice for many aspiring entrepreneurs.
Should You Start A House Cleaning Or Office Cleaning Business? It’s Time To Pick A Niche
You’ve taken the first step by deciding to launch a cleaning business. Now, it’s time to narrow down your idea and pick your niche. Choosing a niche helps give your business a direction and purpose, while allowing you, your management team, and your staff to become experts in your field. Your niche helps you determine your target market, marketing strategies, and processes and procedures that help you gain — and retain — new customers.
Let’s take a look at the types of cleaning services you can offer.
Residential Cleaning Services
One option for your new business is to offer household cleaning services in your area. Take the burden off of busy homeowners and renters by offering your stellar cleaning services. You may opt to provide general housekeeping services, such as wiping down appliances and countertops, cleaning bathrooms, and sweeping and mopping floors. You can also offer additional services to your customers, such as:
- Deep Cleaning: Help clients with their spring cleaning by tackling overlooked tasks, such as wiping baseboards and windows sills, cleaning tile grout, or dusting blinds and shutters.
- Specialty Services: Is there something you can offer that would give your business a competitive edge? It’s okay to think outside of the box here. Washing windows, cleaning swimming pools, and steam cleaning furniture or upholstery are just a few examples of what you can offer clients.
Commercial Cleaning Services
Perhaps you want to help out business owners in your area by offering commercial cleaning services. You can narrow this down even further by catering to specific businesses, such as:
- Rental properties and foreclosures
- Retail shops
Vehicle Cleaning Services
Don’t just limit yourself to home and office cleaning — consider vehicle cleaning and detailing services (cars, motorcycles, RVs, etc.). And if you’re worried about the expense of renting or purchasing a shop, don’t be. Mobile services are growing in popularity and are more convenient for you and your customers.
Choosing Your Niche
These are just a few examples of the types of cleaning services you can offer. Now that you know what types of cleaning businesses are out there, it’s time to narrow down which services you’ll offer. To narrow down your niche, consider the following:
- Customer Needs: Is there a service that isn’t available in your area that you could offer? Is there a specific type of cleaning service that is in-demand?
- Your Goals: What are your short- and long-term goals? If your cleaning business is more of a side gig to make some extra cash, consider taking on a few residential clients. If you picture growing your small business into an empire, think big (e.g., multiple commercial accounts).
- Investment: How much are you willing to invest in your new business? While it’s easy to get started on a smaller scale with just a few supplies, you may be willing to invest more to offer specialty cleaning services or hire a larger staff. A greater investment has the potential to yield a greater profit, so don’t forget to keep your goals in mind.
Choosing your niche boils down to this: Identify a need within the market and create a business that fulfills this need while also helping you meet your personal goals.
Why You Need To Make A Cleaning Service Business Plan
No matter how simple your idea may seem, every business needs to have a business plan. It doesn’t have to be the size of a novel, either. A one-page business plan may be perfectly adequate for your business. Regardless of its size, though, creating a business plan before launching can benefit you in a number of ways.
For starters, your business plan acts as a roadmap for your business. Your plan should include your business goals as well as the details that will help keep you on track toward meeting these goals.
In addition, a business plan is also typically a requirement for startup loans. More established businesses have revenue, a business credit profile, and meet other lending requirements. Startup businesses, on the other hand, don’t yet have a proven track record but can still acquire funding from some lenders with a business plan, projections, and other documentation.
Every business plan is different, but most share a few standard sections, including:
- Executive Summary: This section should include the name of your business, your mission statement, the location of your business, and the services your cleaning business will offer.
- Company Description: In this section, you’ll include the legal structure of your business, a summary of your goals, and an overview of what you provide and your target customers.
- Organization & Management: This includes information about business owners and your management team. Before completing this section, you need to work out the details of how big your crew will be (both now and in the future) as well as how you plan to find those employees.
- Products & Services: This section will contain details about your products and services. Will your focus be on commercial cleaning services or residential services? Will you offer basic cleaning services, or will you provide additional services, such as carpet and upholstery cleaning or floor polishing?
- Market Analysis: Important details to have in this section include statistics, the outlook of the industry, and the strengths and weaknesses of your competitors.
Before creating your business plan, there are a few important decisions you need to make about your business. Of course, your plans may change over time, but for now, consider the following:
- How many employees do you need to get started? How many will you need to add to reach your goals?
- How much money do you need to get started? How will you obtain this funding?
- What are your short-term and long-term goals?
Funding Your Cleaning Business’s Startup Costs
Now, it’s time to talk about money. It’s easy to think about the profit potential of your new business, but as the old saying goes, “It takes money to make money.” So before you start thinking too far into the future, start by first considering startup costs — and more specifically, how you’re going to get the funds to cover those costs.
Not everyone has a chunk of cash in the bank to sink into a new business. Fortunately, there are funding options that allow you to start your cleaning business with minimal funds. Qualifying for a traditional small business loan can be difficult since you don’t have the revenue and business credit profile to prove your track record. However, there are a few startup funding options to consider.
Lines Of Credit
With a traditional loan, you receive a specific amount of money as one lump sum. A line of credit works a little differently. Instead of one lump sum, your lender provides you with a set credit limit. You can make draws from your line of credit up to your credit limit. Instead of receiving all the funds at once, you can draw money as needed to cover operational costs and business expenses. As you repay what you’ve borrowed (plus interest), funds become available to withdraw again.
This is a flexible form of financing that can help you cover expenses now and in the future — from startup costs to unexpected expenses to filling gaps in cashflow. You can apply for lines of credit online or through traditional lenders. Business lines of credit often have less stringent requirements than other types of business loans, but don’t forget to consider the interest rates, fees, and other factors that could increase the cost of borrowing. Check out some of our top picks for small business lines of credit that can help you get your business off the ground.
Business Credit Cards
Business credit cards are just like the personal credit cards you may already have in your wallet. The difference is that these cards are used to cover business expenses. Credit cards are great for covering startup costs, paying an emergency expense, or for paying recurring costs, such as your business cell phone bill or gas for your company vehicles. In fact, you can even receive cash back and other perks by taking advantage of a rewards card. As with any other type of small business funding, make sure you fully understand the cost of borrowing before swiping your new card.
Unsure of where to apply? We’ve got you covered with our list of the best business credit cards for startups and entrepreneurs.
Some lenders are willing to issue loans to startup businesses, but there may be a few potential drawbacks. For starters, you may have higher interest rates and lower borrowing limits than a more established business. You may also be required to put up collateral — an asset that secures the loan and can be seized and sold if you fail to pay your loan as agreed. Start by checking out some of these startup loan options to determine if this is the right funding route for your cleaning business.
Personal Loans For Business
Another option to consider for funding your startup is a personal loan for business. Instead of using your business revenue and credit score, you’ll qualify based on your own credit score and annual income. If you have a good credit score, a low debt-to-income ratio, and a steady income, you could qualify for a loan with low rates and favorable terms.
The downside of this option? If your business isn’t profitable and you fail to pay your loan, you will be held liable for the debt, and your personal assets may be in jeopardy. But if you do pay your loan as agreed, you can potentially score a low-cost, long-term loan to fund your startup.
Sometimes, you have to think outside the box and get a little creative with your funding. Whether you take out a loan from a friend or family member or legally rollover your retirement funds with a ROBS plan, make sure to explore all of your funding options to find the best, most affordable one to launch your cleaning business.
Where To Get A Cleaning Business License & Insurance
As previously mentioned, there aren’t a bunch of certifications and requirements for opening a cleaning business. However, as with any other small business, you will be required to obtain a business license and business insurance to operate legally. In some states and municipalities, additional permits may also be required.
Choose Your Legal Structure
To set up your business, start by choosing your legal structure. Your choice will determine how your business is taxed, what tax forms you’re required to file, and even your personal liability.
Pick Your Business Or DBA Name
Next, you will need to select a business name or a Doing Business As (DBA) name. A DBA name (also known as the trade name) is a fictitious name that may be required based on the legal structure you select and your state and local laws.
Obtain An EIN & State Tax ID
You also need to apply for a federal Employer Identification Number (EIN). This number is issued by the IRS and is used when filing your taxes, opening a business bank account, hiring employees, or applying for required licenses and permits. It’s free and easy to sign up for your EIN through the IRS website. You may also be required to obtain a state tax ID number to pay state taxes. Visit your state’s official website to learn more.
Apply For Licenses & Permits
Unfortunately, there are no one-size-fits-all guidelines for obtaining business licenses and permits. Requirements, fees, and other specific details vary by state, county, and city. Do your research by visiting your state and city website to learn more about what licenses and permits you need, what documentation is required to file, fees, renewal policies, and other important information to keep your business legal.
Make Sure Your Business Is Covered
No matter how careful you are while on the job, accidents can happen. If an incident occurs (such as an employee injury or property damage), your business could be held liable. A lawsuit filed against you can sink your business fast. However, you can avoid these issues by purchasing business insurance. The types of insurance you may want for your cleaning business include:
- General Liability Insurance: This insurance covers property damage and bodily injury that occurs while on the job. For example, if someone slips on a mopped floor and sustains an injury or a piece of furniture is damaged while cleaning, your insurance will cover the associated costs.
- Workers’ Compensation: If you have employees, you need to purchase a workers’ compensation policy. If your employees are injured or become ill while on the job, this insurance will pay associated costs, including medical care, lost wages, and disability benefits.
- Commercial Auto Insurance: You may need to purchase commercial auto insurance for any vehicles used to travel to and from jobs. Commercial auto insurance pays for medical expenses and property damage incurred by yourself or your employees.
The best course of action for obtaining business insurance is to speak to an insurance specialist in your area. These experts can help you understand local laws and insurance requirements and can help you find the right insurance for your cleaning business.
How To Set Rates For Your Cleaning Company
Now, let’s switch gears and talk about something more exciting: profits. To make a profit, you have to set rates that are competitive but still exceed your operational costs. This step requires some research, but it’s time well spent once you’ve calculated rates that maximize your earning potential.
First, determine how you want to charge your clients. You can charge a set fee per square foot, per job, or per hour. Do some market research in your area to find average rates and perform a few sample calculations to determine which option is competitive but still profitable. We’ll revisit this idea later on in this section.
One important thing to keep in mind is that while it may be tempting to undercut your competitors, this could negatively impact your business over the long-term. Sure, your low rates may lure in customers, but if you aren’t making a profit and your pricing isn’t sustainable, your business will suffer and may eventually close its doors.
In addition to your regular rates, there are other charges you need to consider for your cleaning business. Some things to think about include:
- Cancellation Fees: Will you charge a cancellation fee for last-minute cancellations? How much will your fee be, and how long will clients have to cancel before incurring this fee?
- Discounts: Will you offer a discount for recurring jobs?
- Deposits: Should you require a deposit when a job is booked? How much should the deposit be, and will it be charged for all jobs or just larger ones?
Several factors will affect your rates. Location is one big factor. What one cleaning company charges in another part of the country may be too high or too low for your area, so research local companies and pricing. Another factor that influences pricing is the type of cleaning services you offer. For example, a commercial job that requires more work and supplies would warrant a higher charge than a residential cleaning job.
In addition to research, you should also learn how to calculate cash flow. These calculations provide you with projections that show you how much money you can earn over a set period. Then, you can adjust the numbers accordingly to ensure your business is profitable.
Choosing Business Software & A Payment Processor For Your Cleaning Service
Every business — including your cleaning service — should use business software. Business software can help you keep your business organized, track income and expenses, bill customers, and perform other essential functions. Even if you have no prior experience with this software, there are lots of programs out there that are easy enough for beginners. Some of the software essentials for a cleaning business include:
- Accounting Software: Accounting software is software that allows you to balance your books by keeping track of your income and expenses. You can run financial reports and keep an eye on your finances easily with this type of software. Depending on what software you choose, you may also have additional useful features, such as invoicing, inventory, and time tracking. Determine what features are most important for you, research your software options, and pick the best accounting software for your business.
- Payment Processing Software: While it’s perfectly fine to accept cash or personal checks from your clients, these payment methods aren’t always convenient. Give your clients more payment options and get paid faster with payment processing software. This software makes it possible to securely accept debit cards, credit cards, and other forms of payment. We’ll go into more detail on this type of software a little bit later.
- Scheduling Software: As you grow your business, you’ll take on more clients. Keep track of your cleaning jobs with scheduling software. There are a number of features that you can look for that will help simplify scheduling, including online appointments, client reminders, and payment integrations.
- CRM Software: The key to success in your cleaning business is your relationship with your customers. Customer relationship management (CRM) software can help you effectively manage these relationships. Some of the useful features of CRM software include client contact information, lead management, and marketing automation.
How To Choose A Payment Processor For A Cleaning Company
One of the most important types of software for any small business is payment processing software. A payment processor allows you to accept multiple forms of payment, get paid faster, and make paying invoices more convenient for your clients.
With a payment processor, you’ll be able to accept payment types, including:
- Credit cards
- Debit cards
- ACH payments
- Mobile payment services (e.g., Apple Pay)
If you perform a Google search (or even search the Merchant Maverick website), you’ll find an abundance of payment processors. So how do you choose which one is best for your business? Look for the following:
- Security features and fraud prevention
- PCI compliance
- Pricing and fees
- Compatibility and integration
- Online invoicing capabilities
- Mobile POS system for swiping cards
One thing to note is that if your business specializes in commercial cleaning, a B2B payment processor can help lower your costs. Residential businesses will likely fare better with a mobile POS solution that allows them to swipe cards on the spot.
Take a look at our top picks for credit card processors to help you get started!
Supplies & Equipment For Opening A Cleaning Business
One of the most important steps to take before officially launching your business is ensuring you have the right supplies and equipment for the job. Sure, it seems simple — load up your vehicle with essential cleaning supplies, and off you go to your first job, right? Sort of. Before you do that, though, there are a few considerations to keep in mind.
Where To Purchase Supplies & Equipment
While it may be tempting to just go to your local big-box home improvement store, this may not be the most cost-efficient option. However, there are some benefits to hitting your local retailers. As a registered business, you may be eligible for sales tax exemptions at stores such as Home Depot. Visit your local retailer in person or online to find out more about each store’s policies and application processes.
A downside, though, is that product choices may be limited, and product pricing may be more expensive than purchasing from a commercial supplier.
No matter where you do end up purchasing your supplies from, make sure you shop around to ensure you get the best products for the best price.
While most cleaning supplies are pretty affordable, there are also some big-ticket items you may need for your business. Most notably is a business vehicle that is used to travel from job to job and transport your equipment and supplies. Your personal vehicle may be perfectly suitable, but in some cases, you may need to consider leasing or financing a company vehicle. Is your vehicle large enough to transport your supplies and equipment? Do you plan to let your staff use the vehicle? Can you afford new or used equipment, or will it put you in the red before you even get started? Take a look at your situation, do some research, and make the best choice for your business.
Where To Find Your First Cleaning Job (& How To Keep Clients)
Everything is ready for the launch of your business, but there’s just one problem: You don’t have your first client, and you have no idea where to start. Fortunately, there are some easy ways to find your first cleaning job. Start with these ideas:
- Your Contacts: If you have professional and personal contacts, let them know about your business. Even if they aren’t interested in your services, they may know someone who is. And remember to always keep it professional. A “no” now could turn into a “yes” further down the road.
- Online Marketplaces & Buy/Sell Groups: Online marketplaces and local buy/sell/trade groups have soared in popularity, so use this to your advantage. Use search functions within the marketplace or group to find potential clients, or (if allowed) make a post promoting your business. As always, keep it professional and make sure to follow the rules.
- Cold Calling: With everyone now using the internet, cold calling seems like a thing of the past. For some businesses, though, this is still a very effective tactic in securing clients and contracts. Create a list, write a script, and practice a time or two before making that first call. Also, make sure you’re prepared for rejection, hang-ups, and even an irate answerer on the other line.
- Keep Looking & Be Creative: Whether you post an ad in your local newspaper, hang a flyer on a community bulletin board, or leave business cards at a local business, be prepared to do what it takes to secure that first job…or, better yet, a long-term contract. Be patient, creative, persistent, and professional, and you’ll land a client in no time.
Customer Service Is The Key To Customer Retention
Think about the businesses you frequent often. Why do you pick these businesses over their competitors? I bet excellent customer service is at the top of that list. The quality of customer service can make the difference between a lifelong customer and one that avoids your business at all costs (and spreads the word about their bad experience!). For high customer retention, make sure that you always provide exceptional customer service.
What are some ways that you can do that? Here are a few ideas to get you started:
- Right Your Wrongs: It’s always your goal to perform the best job possible, but not everyone is perfect. If you drop the ball, make it right. For example, if you overlooked a cleaning task, return and fix it for no charge. You may even consider offering a discount or perk to your customer as an apology for the oversight.
- Show Up On Time, Every Time: If you set an appointment, keep it. Showing up even a few minutes late looks unprofessional. Make sure that you don’t overbook. If you do — or an emergency rises — talk to your customer. Which leads us to…
- Communicate Clearly: Always communicate with your client. If you have to reschedule, an emergency has arisen, or there’s another problem, don’t be afraid to speak up.
- Take Notes: Take notes about your client’s preferences. For example, does your client prefer a specific cleaner or scent? Is there a room that should be avoided? Is there a task that your client has specifically asked you to do in the past? Keep these notes at the top of your mind for every job you perform.
Marketing Your New Cleaning Business
Now, you have an idea of how to stand out to your clients, but there’s one problem — you don’t have a list of clients just yet. This is where marketing comes in. And the great thing about a cleaning business is that there are a number of marketing tactics that you can add to your arsenal that are easy and inexpensive to implement. Let’s explore some of these options.
A Company Website
A web presence is vital to success in today’s world, so make sure that you set up a company website as soon as possible. At a minimum, your website should include:
- Contact information (email, business phone, cell phone)
- Links to social media profiles
- List of services
As your business grows, take it a few steps further and improve your website with photos of completed jobs, online appointments, and your payment processing portal.
The great news is you don’t have to be a website developer to create a professional website. If you don’t want to invest in the services of a professional, check out website builders that are easy and inexpensive to use.
Social media is a great (and free!) way to spread the word about your business. Set up Instagram, Twitter, Facebook, YouTube, and other sites and channels for your cleaning business. While you can certainly invest in sponsored posts and advertising, take advantage of the free use of social media by posting images relevant to your business, announcing specials and discounts, and interacting with current and potential clients.
On your website, include an option for visitors to sign up for your email list. You can then use this list to send out emails about your services, current promotions for new customers, seasonal discounts, and any interesting news and updates that would appeal to your client base. Email marketing software makes this an easy-to-implement marketing tool, so be sure to check out your options.
You never know when you’ll meet your next customer, so make sure to keep business cards on hand. Your business card should include your business name, your name and role in the company, and contact information, such as your phone number and/or email address. You may also opt to include social media or company website URLs, but make sure that your design isn’t overly cluttered. Go online and shop around to find a business that lets you design and purchase business cards in just a few easy steps.
The Essential Checklist For Starting A Cleaning Business
Are you feeling overwhelmed? It is a lot to take in, so we’ll break everything down in an easy-to-digest checklist that you can refer back to when needed as you launch your cleaning business.
- Pick your niche.
- What type of cleaning services will you offer your customers?
- Create a business plan.
- Research funding options.
- How much capital do you need to start your business?
- What funding options would be the most cost-efficient?
- What funding options would you qualify for?
- Make your business legal.
- What licenses, permits, and certifications are required in your area?
- What will you name your business?
- What legal structure will your business be? What steps are required?
- What insurance do you need, how much will it cost, and where will you purchase it?
- Set your rates.
- How will you charge your clients? By square footage, per job, or some other way?
- How much are your rates?
- Will you charge additional fees? What is the purpose of these fees, and how much should you charge?
- Is your pricing competitive yet profitable?
- Do cash flow projections to help determine your rates.
- Choose business software.
- What software do you need?
- Set a budget for software.
- Consider your skill level when selecting software.
- Purchase supplies and equipment.
- What supplies do you need to do your job?
- How much will initial supplies cost?
- Where will you purchase your supplies and equipment?
- Will you need a commercial vehicle?
- Snag your first job.
- Remember: Great customer service is key to lasting professional relationships!
- Talk to your contacts.
- Utilize online groups and marketplaces.
- Consider cold calling.
- Get creative.
- Market your business.
- Set up your business website.
- Create social media profiles.
- Use email marketing software to set up email lists.
- Order and distribute business cards.
Got Everything You Need For Starting A Cleaning Service? Get Out There & Get Going!
You have the supplies you need, you’ve got your insurance and business license in place, and you’re armed with the knowledge you need to create a successful business. You’re now officially a small business owner!
You’re probably feeling excited, scared, and a mixture of other emotions. Owning your own cleaning business can be full of ups and downs. But with careful planning, research, wise financial decisions, hard work, and great customer service, you’ll soon be on the path to entrepreneurial success. Good luck!