Fact: Everyone wants to keep their home and workplace tidy.
Here’s another fact: Not everyone has the time, patience, or energy to do the work themselves.
According to a Statista report, in 2019, 24.15% of facility managers surveyed reported that they currently outsourced cleaning services—a big jump from 2018 when only 15.35% reported outsourcing.
That gap presents a good opportunity for entrepreneurs who don’t mind getting their hands dirty—and all signs point to that only getting bigger. According to the Bureau of Labor Statistics, there were 2.3 million jobs in the cleaning sector as of 2016. The field is expected to grow 10% from 2016 to 2026. That’s 3% more than the national average. And with faster-than-average growth comes the need for more services, more skilled workers, and more qualified companies that can provide them. Today, the cleaning services industry is valued at $46 million.
The cleaning industry’s growth rate makes sense: It’s a service that’s flexible, built quickly, and always in demand. That makes the cleaning industry perfect for entrepreneurs searching for an opportunity with low overhead, the absence of typical operating costs, and recurring, reliable business.
In This Business Formation Guide
Does your idea of a great day off from work involve firing up your vacuum, getting out your duster, and giving your home a deep clean? Maybe you’ve even nailed down how to thoroughly clean a house, an apartment, or an office in a timely manner—and how to do it well. But that’s only half of what it takes to be successful as a cleaning business. Before you start scrubbing your way to a bright, shiny future, you need to know exactly how to start a cleaning business.
At Swyft Filings, we help aspiring business owners like yourself navigate the critical steps of becoming an entrepreneur. In this business formation guide, we break down the pros and cons of starting a cleaning business, and all the steps in between to get your first company up and running (and vacuuming, dusting, and polishing).
Why Should You Consider The Cleaning Industry?
Before you can even start considering the logistics of starting a business (like how you’ll structure your business, how you’ll build a budget, or how you’ll market yourself), it’s best to start with the basics: Why should you even consider the cleaning industry in the first place?
Here’s the truth about starting a cleaning business: Cleaning toilets and mopping floors isn’t always the first thing that comes to mind when you think “entrepreneur.” And it likely isn’t the most glamorous, either.
Still, the cleaning industry’s seemingly endless list of benefits makes it more approachable—and more accessible—than most.
If you’re considering starting your first cleaning business, here are just a few of the pros you can expect when you break into the industry.
- You’ll benefit from lower start-up costs than other industries: Getting your first business up and running can cost you anywhere from $2,000 to $5,000—or more. But the cleaning industry consistently falls within that lower cost range. Because you can start your business right out of the comfort of your home with nothing more than a modest arsenal of cleaning supplies, you could snag your first cleaning job for as little as $100.
- There’s only a few overhead expenses: A cleaning business won’t ask much of you to get started. Outside of cleaning supplies and other essentials, someone interested in starting a cleaning business doesn’t have to fork over a lot of cash to buy a bunch of equipment, vehicles or inventory. You don’t need to worry about paying rent or utilities for an office space either—you can start your cleaning busy right out of your own home.
- You can run your entire business from home: The biggest hurdle for a lot of first-time entrepreneurs can be securing the perfect (and most affordable) storefront or office location. With a cleaning business, however, you can get everything started from your home or your garage. All you need is some extra space to store those new cleaning supplies.
- You can set your own schedule: Being self-employed and the boss of your own company means you have total control over your schedule. You can determine how many clients to take on, what days you want to work, and for how long.
- You don’t need a ton of experience: You don’t need to shell out thousands of dollars for courses or spend months gaining experience at entry-level jobs. Instead, being successful in the cleaning industry means having practical business smarts, resilience to weather the ups and downs, and a hunger to learn new things.
- You’re entering into a reliable market: As long as there’s stuff that can get dirty, you’ll have business. Businesses will always want a tidy office, and busy families will always need a helping hand cleaning the home, no matter how rocky the economy is.
- You’ll benefit from repeat business: Cleaning is an ongoing service business. That means your clients will need the service over and over, which brings in consistent business for you as well as a stable, regular income.
Why Shouldn’t You Consider The Cleaning Industry?
No business idea is perfect, and even the cleaning industry comes with a few downsides. It’s important to note, though, that this industry’s benefits oftentimes far outweigh some of the negatives. Here’s another important thing to know: Many of these drawbacks are pervasive for any new business owner, no matter the industry.
- The work can be grueling (and kind of gross): Cleaning is a physical job. It can mean doing the same work over and over again, lifting a lot of heavy supplies, and dealing with pungent products and gross situations. Still, it’s important to remember that those scenarios aren’t forever. As your business grows, you can start hiring a cleaning crew to handle the dirty work for you.
- You might not bring in a lot of cash (at first): One of the biggest challenges that comes with starting any new business is getting your first client. That’s why you can expect your income to be pretty slow at first. But as your business grows, your marketing expands, and you start landing your first couple clients, it’s easy for things to turn around fast.
- There’s a lot of competition: As of 2018, there were 3.24 million people working in the cleaning industry. That kind of industry saturation can make it pretty hard to stand out and differentiate yourself. Making a name for yourself, though, is totally in your control—you just need to find your unique selling points, whether that’s through the type of service you provide, your branding, or the way you interact with your customers.
- You’re going to need to hire a crew (eventually): You can’t expect to be a one-person-show forever. To grow your business, you’ll need to reach more customers. And you’ll need a bigger team to help you get there. Bringing on a cleaning crew introduces a new layer of complexity, paperwork, financial responsibilities, and stress. But as you see your client list grow, you’ll realize it’s all worth it.
Key Steps To Get Started in the Cleaning Industry
Decide what you want to clean.
Are you more comfortable working in private residences, or does the idea of cleaning a high-rise office building excite you?
Depending on your interests and abilities, you have a lot of options when it comes to what you can clean. But before you start racing towards the biggest building you can think of, consider this: It’s oftentimes easiest to start small and work your way into the bigger jobs. That’s why residential cleaning is often the easiest market to crack into for new entrepreneurs. From there, you can build up your references and work experience to grow a client list filled with larger-scale projects in the future (then you can race towards those big buildings).
One great thing about cleaning residential areas? The demand for it is higher than ever before. Even in a tightening economy, more than six million people hire domestic housekeeping and cleaning services, up one million from just 10 years ago. That means you’ll likely be able to find work easily, especially if you know you’re committed to residential cleaning from the get-go.
Still considering commercial cleaning (which includes everything from retail businesses to offices)? It’s not impossible. Commercial businesses will help scale your business much faster than residential. But these accounts may require more resources and equipment. Commercial businesses usually include some level of janitorial work, which requires a wider range of services (this can range from cleaning floors and stocking bathrooms, to cleaning windows and handling minor building maintenance and repairs). You’ll also be more likely to work outside of traditional business hours.
Find what makes your business different from everyone else.
Success as a cleaner will come down to the quality of the service you provide, whether that’s expertise in a specialized area—like cleaning antique dishware or carpets—or simply your efficient and friendly service.
Choosing a specialized area of cleaning helps to set you apart from your competitors, rather than aiming for a more generic, one-size-fits-all approach. Here are a few areas you can consider specializing in.
Ceiling and Wall Cleaning: Ceilings and walls trap odors, smoke, oils, cooking grease, nicotine, and all other kinds of gross stuff. These contaminants can reduce light by as much as 60%, dull the appearance of a facility, and contribute to an unhealthy environment. The problem is, though, it’s a daunting task for most homeowners and offices. That opens the door wide open for cleaning service specialties.
Restroom Cleaning: There’s a huge need for restroom cleaning, particularly in large public buildings, sports stadiums and arenas, and schools (because literally nobody wants a dirty restroom). That’s why companies that specialize in this work have no trouble keeping busy.
Green Cleaning: These days, green cleaning has gone mainstream. In fact, 91% of consumers purchase green products because they are concerned about their family’s health. And 73% often do research to understand the safety of ingredients to which their family is exposed. That means there’s a huge opportunity to provide a safe, green cleaning service to give families peace of mind.
Choose your market (and do your research).
As you think about the type of cleaning services you want to provide, remember this: What you offer should be based on local demands. Choose an ideal radius you’d like to service. Then, take a good look at the businesses, homes, and buildings that are around you. What is the average income? What kind of homes fill the area? Are there a lot of families with working parents? Are there a lot of apartment complexes, or are there mainly businesses and office parks? This will be your soon-to-be client base, so get to know them, their needs, and how you can best service them.
Competitor research is also fundamental here. What services already exist? Where are the gaps? How can you fit in? A simple Google search can give you a lot of the information you need, and it’s a vital task to ensure your business enters into the market successfully. If there are already four cleaning businesses that focus on green products and methods, then you should probably consider something else.
Plan your budget.
You’re going to have to spend a little money up front to start your cleaning business. But, it is possible to start a cleaning business without going into debt, taking out a loan, or pillaging your savings.
As you plan out your budget, here are a few must-haves to account for:
- Licenses and permits: This will cost you anywhere from $30 to $60 if you register as a sole proprietor. If you’re registering as a limited liability company, that’ll cost a little more: Anywhere from $100 to $500.
- Insurance: We’ll dive into your insurance options later, but plan on allocating $500 to $3,500 annually. The variance has to do with the number of employees you have on your team.
- Cleaning supplies: At a minimum, plan on shelling out anywhere from $300 to $600. How much or how little you spend depends on the type of tools you want to purchase and your general preference on quality. High-quality, specialty vacuums can cost $200 to $300. And when it comes to all-purpose cleaning solutions (which, of course, you’ll need a lot of), expect to pay $10 for one large supply. Other things to consider include $10 for a broom, $20 for a mop, and $20 for dusting supplies.
- Marketing: To print brochures around town and build your first website, expect to pay around $100 to $200 to get the initial word out about your business.
Set your pricing rates.
There’s a sweet spot when determining your pricing rates: You don’t want to charge too much. But you also don’t want to sell your short by asking for too little.
So where do you start? Do your homework. Research local cleaning services online as if you were a potential client. Find out how much they’re charging and how they set their rates. Are they hourly? Do they have a flat rate? Maybe they even charge by the room or by the square footage they cover. Once you get a general idea of local rates, you’ll want to factor in the costs of all the things we just outlined above. Then, figure out where you can comfortably fit in.
If you’re still unsure of the best route, sometimes it’s best to use an hourly rate when you’re first starting your business. That way, you’ll get a better idea of how long certain tasks, such as cleaning bathrooms or scrubbing the stove, take you to complete. You can always readjust from there. As a starting point, however, the average professional cleaning business charges between $50 to $90 an hour for single family homes.
Not interested in charging by the hour? That’s OK, too! If you are familiar with the houses and businesses in your area (and you should be, because you already did the research), you can use that knowledge to your advantage by charging a flat rate. To come to a reasonable flat rate, estimate the number of hours it will take you to clean a particular house.
The advantage here is full transparency for customers: You’re giving them a single clear price for your services, so there are no surprises when the job is done. They know exactly what they’re getting and for how much (no matter how long the job actually takes). As a starting point, the average cleaning business charges a flat rate of $120 to $150.
If you’re still scratching your head, here are a few additional factors to help you establish a strong pricing structure that’s tailored uniquely for your business.
- Cost of material: Until you’ve been in business for a bit, you'll have to estimate the ongoing costs of materials per job. You’ll want to make sure that you’re charging enough to balance out the costs of your supplies—and then some.
- Overhead costs: This consists of all the nonlabor, indirect expenses required to operate your business. When you're starting out, you won't have past expenses to guide you, so use figures that are accepted industry averages. You can raise or lower the numbers later to suit the realities of your operation.
- Profit: This is the difference between what it costs to provide a service and what you actually charge the customer. Figure your net profit into your estimate by applying a percentage of profit factor to the combined costs of materials and overhead. The profit factor will be larger than the actual percentage of gross revenue you'll end up with for your net profit. For example, if you plan to net 38% before taxes out of your gross revenue, you will need to apply a profit factor of about 61.3% to your materials and overhead to achieve that target.
Choose a business structure.
Once you’ve cranked some numbers and done your research, you’ll need to set up the legal structure that your business will operate under. The two most popular business structures for small businesses are sole proprietorships and limited liability companies (LLCs).
So what’s the difference between them? Ask a lot of new entrepreneurs, and they’ll probably tell you they registered their business as a sole proprietor. That’s because there’s not a ton of paperwork involved here and it isn’t super expensive. The other benefit, of course, if that you’ll complete control over your business.
Still, there are disadvantages to a sole proprietorship: There is no clear distinction between your business and your personal assets. And that can get pretty messy if things go wrong. For example, you’ll be held liable if your business tanks because of extreme debt—and your personal assets will be at risk.
The other option is to register as a limited liability company (LLC). This business structure gives owners more protection from personal liability than a sole proprietor has. That way, if your cleaning company goes out of business for financial reasons, your personal assets are most likely protected.
The downside to an LLC, however, is the paperwork. Because the tax structure of an LLC is a little more complicated than a sole proprietorship, you’ll be faced with more paperwork and higher startup costs.
Protect your business with insurance.
Being an entrepreneur can free you from the piles of paperwork and processes you had at your desk job. But that doesn’t mean you’re completely off the hook: If you don’t protect yourself against risks, it can be extremely costly, and that means taking on some additional paperwork. Window cleaners, house cleaners, carpet cleaners, and other cleaning professionals all face unique risks, including slip-and-fall accidents and property damage. With the proper insurance policies in place, however, you can avoid some of the more expensive pitfalls that sometimes come with the job.
Policies that can help cleaning services professionals include:
- General liability insurance: This covers common injuries, such as slip-and-fall accidents and accidental damage to customer property (sometimes breaking things is just inevitable).
- Workers’ compensation insurance: If you eventually decide to hire employees, this is a big one. This pays for employees’ medical bills for work-related injuries and lost wages while they’re unable to work. Most states require cleaning businesses with employees to purchase workers’ compensation.
- Commercial auto insurance: As a professional cleaner, you’ll be on the road a lot while traveling from one customer to the next. This can pay for third-party property damage and medical bills from car accidents. It can also cover damage caused by weather, theft, and vandalism.
- Janitorial bonds: The bonds guarantee that a client will be reimbursed if one of your employees steals a customer’s money or property or breaks anything. Again, this only applies if you decide to hire additional help for your business.
Purchase your first batch of cleaning equipment.
What’s a cleaning business without a closet full of cleaning supplies and equipment? This is a big step in finally bringing your cleaning business dreams to fruition.
This step, more than all the others, seems a little more straightforward, right? Not quite. You’re going to have a lot of options to choose from—like organic and scent-free, to gentle products that cater to customers with allergies and sensitivities. That’s not even getting into the different kinds of vacuums, scrubbing brushes, and dusters you can buy.
To help you get started, here are a few things you should absolutely throw into your shopping cart on your first supply run.
- Cleaning uniform or apron
- Window cleaner
- Paper towels
- Latex gloves
- Scrubbing brushes
- All-purpose cleaner
You can purchase everything at your local hardware store as you launch your business and figure out which products you prefer. But as your business grows and you get a feel for which products you like best, consider purchasing your supplies in bulk from a wholesaler or a local janitorial supplier (they’re easy to find with a simple Google search). That’ll help you cut supply costs (and re-stocking trips) over time.
Invest in marketing (and get your first client).
You have your budget. You filed your paperwork. You have your supplies and uniform ready to go. Now you just have to find that first client so you can spring into action.
But how exactly do you lock in that first client? It starts with marketing and getting the word out about your new business. And fortunately, there are a handful of ways to do just that.
Get your business listed on Google.
Think about how you typically search for a business. You head to Google, and you type in whatever service you want in the region you’re located in (like, “home cleaning in Chicago” or “carpet cleaning in Dallas”).
Creating a business profile on Google is completely free. Once you register your business, it will show up on Google search results and on Google Maps. Plus, you can include information like your website, phone number, and business hours so prospects can get the full scoop with a simple search. Registering your business also lets customers leave a Google review, which will be your most important asset when you get started.
Create your own website.
Your customers live online, which means they need to be able to find you there, too. Once they do a Google search for your services, they’ll need a place to land to learn more.
Fortunately, creating your own website from scratch is not as complicated as it sounds. Consider a website like Squarespace, Weebly, or Wix, which makes building a website as easy as dragging and dropping the elements you love and adding in the critical information (pricing, hours, services provided, and a little bit about who you are).
Once you’ve nailed down the content, you’ll just need a registered domain and a web hosting service. Again, sites like Squarespace and Wix let you do all of that within their own platform. That means you could have a new website up and running in as little as a day!
Use social media marketing.
Reach potential customers right where they spend most of their time: On social media. Building your own business page on Facebook is a good starting point. It tells people you’re a legitimate business—but it also gives you a chance to showcase your personality and connect with your customers.
Facebook also opens up the door to paid advertising. For just a few dollars a day, you can create targeted ads that can reach your ideal customers, so your name pops up right in their newsfeed.
Don’t forget word-of-mouth marketing.
This is where your friends and family can do you a huge favor. Did you know that nine out of ten consumers are more likely to trust a brand recommended by a friend? Enlist an army of people you trust to spread the word about your new business, and watch the new customers come flowing in.
If you’re not into asking for favors, you have other options. Things like business flyers can go a long way in your local community. Think about all the business flyers you’ve ever noticed while waiting for coffee at your local coffee shop, or when visiting your local gym—they get a lot of eyeballs on them.
When you’re building your flyer, just make sure you’re including pricing, hours, and contact details. This is a good place to introduce special offers, too. Even something as simple as 15% off your first cleaning can convert a passerby into a loyal customer.
Let us know if you need help starting your first cleaning business!
With the right business model and marketing plan in place, you’ve already made your first step toward getting your first customer. If you need help with the incorporation and compliance aspects of your business, contact the business experts at Swyft Filingsfor assistance. That way you can spend more time growing your dream business while we handle the paperwork.