The Complete Guide To Starting A Cleaning Business: What You Need & How To Find Clients
Are you looking to start your own cleaning business? Find everything you need to know about starting a cleaning business with this guide!
How can you start your own cleaning business? The COVID-19 pandemic taught us that everything needs to be cleaned more than we thought. Take advantage of this and become a small business owner!
Now that workers are returning to the office and spending less time at home, there is less time to clean and keep up on the chores they used to be able to do during the workday. With the return to the office comes regular cleaning/janitorial needs, deep cleaning and sanitizing services are still crucial for many businesses, and carpooling kids to school and beyond leaves cars in dire need of some TLC.
So, if you’ve asked yourself, “What do I need to start a cleaning business?” Read on! We’ll walk you through starting your business, choosing your niche, setting your rate, and getting your first client!
Table of Contents
- Why Start A Cleaning Business?
- Choosing A Niche For Your Cleaning Business
- Making A Cleaning Service Business Plan
- Funding Your Cleaning Business’s Startup Costs
- Registering Your New Cleaning Business
- Setting Rates For Your Cleaning Company
- Choosing Business Software & A Payment Processor For Your Cleaning Service
- Obtaining Supplies & Equipment For A Cleaning Company
- How To Get Clients For A Cleaning Business
- Are You Ready To Launch Your Cleaning Business?
- FAQs: Starting A Cleaning Business
Why Start A Cleaning Business?
Before we get into the nitty-gritty of starting your cleaning business, let’s go over the benefits of starting out in this industry.
- Cleaning businesses have relatively slow startup costs
- There’s no need to worry about a physical office or storefront
- Large, expensive equipment is rarely needed
- You can use your own personal vehicle
- Cleaning businesses don’t require a specific degree or certification
- There will always be a need for cleaning services
Even though this line of work is fairly accessible for new business owners, it doesn’t mean it’s easy. You need to have a solid work ethic, an eye for detail, and a willingness to put in the elbow grease required to get the job done right every single time.
To give you an idea of the future outlook for the cleaning service industry, the Bureau of Labor has projected that the building cleaning industry will grow 5.7% in the 10-year period between 2021 and 2031. 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.
Choosing A Niche For Your Cleaning Business
It’s time to pick your niche!
Choosing a niche gives 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 & procedures that help you find and keep new customers.
Let’s take a look at some of the most common types of cleaning services you can offer.
Residential Cleaning Services
Take the burden off of busy homeowners and renters by offering your stellar cleaning services. You can 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.
- Move-in/Move-out Services: You can offer to help clients earn back their deposits by leaving the old space better than they found it. On the other side of things, you can help the same or different clients start off on the right foot by preparing their new spaces for their arrival with deep cleaning and even documentation of existing damages.
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 building cleaning, consider vehicle cleaning and detailing services (cars, motorcycles, RVs, boats, etc.). If you’re worried about the expense of renting or purchasing a shop, don’t be. Bring your cleaning expertise to your clients! Mobile services are growing in popularity and are more convenient for you and your customers in the long run. You can even run a detailing service out of your own garage and driveway if you have the space for it!
Choosing Your Niche
These are just a few examples of cleaning services you can 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?
- 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 want to turn cleaning into your full-time gig, 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.
Making A Cleaning Service Business Plan
No matter how simple your idea may seem, every business needs to have a business plan, and a one-page business plan may be perfectly adequate for your needs. 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
- Company Description
- Organization & Management
- Products & Services
- Market Analysis
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 these funds?
- What are your short-term and long-term goals?
Another important detail to consider while making your business plan is whether or not you are going to be a one-person show. Learn how to hire your first employee and what to expect in terms of your business budget and payroll taxes.
Funding Your Cleaning Business’s Startup Costs
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 how you will cover them.
Not everyone has extra 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 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. 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 terms before making your decision. Check out some of our top picks for small business lines of credit that can help you get your cleaning business off the ground.
Business Credit Cards
Business credit cards are just like personal credit cards, except they are only used to cover business expenses. Credit cards are great for covering startup costs, paying emergency expenses, 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 signing anything.
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 are a few potential drawbacks. 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 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.
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 roll over your retirement funds with a ROBS plan, make sure to explore all of your funding options to find the best, most affordable option to launch your cleaning business. Make sure to look into crowdfunding options like GoFundMe or launch a campaign on Kickstarter.
Registering Your New Cleaning Business
As previously mentioned, there aren’t a lot 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, so make sure to do your own research.
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, city, and even county. Do your research 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 new cleaning 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. Most businesses need general liability insurance.
- 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 find the right insurance for your cleaning business. Check out our guide to cleaning insurance for more information.
Setting Rates For Your Cleaning Company
Let’s 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.
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.
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 not succeed.
In addition to your regular rates, there are other charges you need to consider for your cleaning business.
- 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 or customer referrals?
- 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 of the biggest. 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 this 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 should use business software. It 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, there are a lot of programs that are easy for beginners to learn.
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.
- 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 multiple 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!
Obtaining Supplies & Equipment For A Cleaning Company
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. 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. That being said, there are some benefits to buying from your local retailers. As a registered business, you may be eligible for sales tax exemptions at stores such as Lowe’s. Visit your local retailer in person or online to find out more about each store’s policies and application processes.
One thing to consider through is that product choices may be limited at local stores and 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 notable 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.
How To Get Clients For A Cleaning Business
Once you start your business and have started to get the word out, you’ll want to drum up consistent business. Where are the best places to find clients?
1. Build A Company Website
A web presence is vital to your business’s success, so make sure that you set up a website as soon as possible. At a minimum, your website needs to 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 scheduling software, 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, there are free website builders available.
2. Establish A Social Media Presence
Social media is a great (and free!) way to spread the word about your business. Set up Instagram, Facebook, YouTube, Tik Tok, 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.
There is a large audience on platforms like YouTube and Tik Tok for cleaning videos. Short snippets of satisfying before-and-afters, product recommendations, examples of services you provide, and even tips for other aspiring cleaners, professional or otherwise. You also have the opportunity to potentially gain sponsorships from popular cleaning companies with a large social media presence like Scrub Daddy.
3. Build An Email List
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 can incorporate this mailing list into other materials using QR codes that link to your subscription page. Feature them on your company cars, the uniform you wear, and even the cards you leave behind after completing your jobs.
4. Make Business Cards
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.
You can use these business cards as another way to hopefully gain referrals. Leave them behind on the kitchen counter, on the dash of the car, or at the receptionist’s desk along with some mints or another small token of your thanks as a personal touch and a handy way for your clients to keep your information on hand.
5. Ask For Customer Referrals
Word-of-mouth is a powerful way to meet new clients and build your professional network when you’re just starting out. Offer an incentive of a percentage discount for both the existing client and your new customers to increase the chances of referrals. Ask your customers to post photos and reviews to your website once you’ve created a section for them. Make sure they tag your accounts in anything they post on social media so their followers and friends can learn about your business and see the great work you do!
One idea that is becoming increasingly popular for small businesses is punch cards. You’re probably familiar with the concept, but have you considered adding referrals as a punch? Every time a client receives a service, they get a punch or stamp on their card (which conveniently has your business card information on the back) and every client that they refer gets them a punch or stamp as well. You could run specials like two-for-one punches per referral and the 10th punch or stamp is a free service.
6. Network With Related Cleaning Businesses in Your Area
While working with direct competitors isn’t always advisable, there’s nothing wrong with being friendly and networking with cleaning businesses that offer services complimentary to yours. If you choose to only offer residential cleaning services, partner up with a commercial cleaner or two so you have a contact on hand the next time a client mentions needing a larger job completed. Do you specialize in auto detailing and notice a lot of your clients complaining about dog hair or muddy paws in the rainy months? Connect with a local mobile pet groomer and a residential cleaner to help your clients keep their pets and their floors as clean as their vehicles!
Networking with other businesses will also help you gauge the kinds of services your community needs. You can research prices, share marketing strategies, and help each other gain followers through giveaways and other partnerships.
7. List Your Business On Online Marketplaces
Along with your own website and social media, take advantage of already existing platforms to promote your business and reach potential customers. Some of the most popular marketplace platforms for cleaning businesses are Handy, TaskRabbit, and TIDY.
Handy offers a 60-second booking process, secure payment, and all bookings are backed by the Handy Happiness Guarantee. This guarantee ensures that, in the rare event of damage, Handy’s got your back. Bookings made and paid for directly on the Handy platform are insured.
TaskRabbit offers same-day services, connecting users with skilled “Taskers” to help with projects big and small. They also have a social good initiative, TaskRabbit for Good (TR4G), which leverages their business, technology, and people as a force for good in local communities. Through this program, Taskers can use their abilities to work with local nonprofits and help those most in need.
TIDY is unique in the world of online marketplaces. It is software designed with property management and professionals in mind. The software offers automated tools for home service professionals (like you!), residential owners & renters, rental property managers, and office property managers.
Are You Ready To Launch Your Cleaning Business?
Now that you have the basics to help you get started, it’s time for you to take the next steps! Do the research necessary for legality in your area, collect your supplies, make your business plan, and get started. You’re on your way to officially becoming a small business owner with a cleaning business.
Owning a small business can be full of ups and downs, excitement, and fear. With careful planning, detailed research, informed financial decisions, hard work, and dedication to great customer service, you’ll soon be on the path to entrepreneurial success. Good luck!