How to Start a Cleaning Business | Credibly

2020-12-15

Minyang Jiang

Spearheading your own cleaning business can be an inexpensive entry into entrepreneurship. With low startup costs and an expansive market, almost anyone willing to put in the time and work can find success in the cleaning industry. Doing so, however, requires an understanding of the market for cleaning services, the requirements for operating a small business, and the operations involved in cleaning someone’s home or office. 

Whether you are looking to start a commercial or residential cleaning business,  this step-by-step guide will help you up and running in the right direction. 

1. Choose Between Commercial Cleaning and Residential Cleaning

Before you can get your cleaning company off the ground, you need to ask yourself a few questions to help define your business and its path forward. Perhaps the most basic of these questions is whether or not your cleaning services will focus on individual households or on business properties. Both commercial and residential cleaning services are high demand services, and both face the same flexible market that favors small business owners. However, there are a few notable differences between commercial and residential cleaning services that you should consider.

Residential cleaning jobs are those that focus on a client’s home. Some common services offered by businesses specializing in this area range from deep cleaning a client’s house to helping homeowners clean their residences before or after a move. Pricing for residential cleaning usually varies depending on the size of a home, the scale of the job, and the extent of the services you offer. 

While starting a residential cleaning service allows owners to take on clients without restrictions, with a likely chance of attracting repeat business, it also requires that you provide cleaning products and equipment. After all, if most households had the necessary equipment to execute a deep cleaning, there wouldn’t be such a large market for residential cleaners! 

On the other hand, you may want to organize your business around commercial cleaning work. Commercial cleaning jobs can entail completing routine custodial work for a business’s office, performing specialized cleaning for companies with certain machinery or equipment, or helping businesses dispose of and clean up waste from their own work. 

A major difference between residential and commercial cleaning is that, while residential work is typically gig-based with a ranging scope of work and pricing, commercial cleaning jobs tend to be contract-based, with more defined expectations and rates. Common commercial cleaning services can include general office cleaning, window washing for apartment complexes, or carpet replacement and cleaning for retail spaces. 

Whether offering commercial or residential work, it’s worth noting that providing a specialized array of services is a great way to attract new clients and cement your place in the market. For example, there’s been a recent uptick in support for cleaning services that use “green” supplies and equipment rather than traditional bleaches and detergents that may harm the environment. 

You might also consider marketing your business around a singular service — such as carpet or window cleaning — that businesses and households alike might require. Doing so would allow you to stake out a niche in both the commercial and residential market, perhaps prolonging the longevity of your business. However, it’s important to note that businesses that provide a range of services are best suited to grow and expand. 

2. Develop a Cleaning Business Plan

Once you’ve determined the range of services your cleaning business will offer, you should set out to develop a comprehensive business plan for your company. Beyond laying out the specific products and services offered by your company, a well-organized business plan should include information about your company’s management team, history, revenue, costs for your operation, and growth projections.

Within your business plan, including marketing and growth strategies for your services, as well as the markets you intend to serve. Will you rely on word-of-mouth advertising to attract clients, or do you plan to take advantage of social media to spread the word about your business? You’ll also want to prove the validity of your plans with stringent market analysis; showing that you understand current market trends will prove to potential investors that you have grounded and reasonable expectations and projections for your business. 

Speaking of investors, perhaps the most important reason to carefully consider your business plan is that it can be practically impossible to obtain startup funding without one. Whether you’re looking to attract investors or qualify for a traditional bank loan, a well-defined business plan is often a requirement for receiving small business financing. Lenders and investors alike are much more likely to fund your venture if they are confident in you as a business owner and your company’s potential for growth. 

3. Obtain the Required Business License

Every new business must obtain certain certifications and licenses in order to operate legally. For cleaning businesses, which often operate in the homes or offices of private citizens, obtaining proper licensing is especially important. Local or state governments may require a variety of documents to prove the legitimacy of your business, and many clients may wish to see such proof of your business acumen before agreeing to work with your company. For a list of the basic licenses and registration requirements of new small businesses in your state, you may want to visit the Small Business Administration (SBA) website. 

Depending on which services your cleaning business plans to provide, there may be additional paperwork and licensing requirements. For example, if your business plans to offer industrial or construction cleanup services, you may need licensing to operate the necessary equipment. If you plan to offer high-risk cleaning services such as medical and hazardous waste cleanup, you may need to undergo additional training and licensing for handling such materials. 

4. Purchase Required Equipment and Cleaning Supplies

Once you have a complete idea of your business and its path forward, you should consider how you will complete the work you set out to do. For cleaning businesses in particular, there are a number of supplies and machines that you may need to provide to complete a given job. Many home cleaners are counted on by clients to provide top-of-the-line service at little effort to the homeowner; this often means providing machinery and uncommon cleaning materials. When launching a cleaning business, owners should account for a variety of equipment and supply costs that can fluctuate based on the job. Common expenses for new cleaning businesses include industrial cleaning equipment such as vacuums and power-scrubbers, supplies like bleach and detergent, and vehicles to help transport these materials from site to site. 

In order to cover the costs of these supplies and equipment, it’s important that your business has ample working capital on hand to meet your operational expenses at the early stages of business. While many owners dip into their savings to obtain necessary funds, another option would be to apply for working capital loans. Working capital loans allow small business owners to stabilize their cash flows as they finance their business. To cover the cost of transportation or machinery, you may also pursue equipment financing. An equipment loan could grant your business access to much-needed machinery without requiring you to bear the full cost of purchase and disrupting your balance sheets. 

While many cleaning businesses initially cover the costs of operating in the early stages of growth, additional financing can help propel you to the next stage. A well-written business plan can help you apply for equipment financing or other funding to cover the costs of materials, machinery, and additional employees.

5. Set Reasonable and Competitive Pricing

A great step to take toward cementing your place in the market is to set well-thought-out, competitive pricing standards compared to competitors. 

Whether you choose to charge customers an hourly rate, a flat fee per job, or a term contract for multiple jobs, ensure that your pricing and services are at least comparable to other cleaning services in your area. The same flexible market that allowed you to start your business can also allow customers to find a new custodial service if they aren’t satisfied; keeping your prices enticing, competitive, and reflective of the quality of work is a great way to improve customer retention. It’s also important to note that “competitive” prices aren’t always lower prices. You very well may be able to convince customers to pay a higher price if they believe your work is deserving of it. 

Before you determine your prices, make sure you understand the costs associated with starting a cleaning operation. Set your prices high enough to recoup your initial investment in your business (licensing fees, supply purchases, transportation), but low enough to attract customers and maintain customers. 

6. Work, Work, Work

While the startup costs for a cleaning service are relatively low, and the opportunities for earning are plentiful, it takes serious legwork to get your business off the ground. In addition to completing the registration and financing steps outlined above, you’ll need to promote and market your business, connect with potential customers, and clean. This last step is probably most important; the more high-quality work you do in the early stages of business, the stronger your reputation becomes, and the easier it will be to get additional clients. 

An important consideration in these early stages is whether or not you will hire any other employees to assist you with your work. However, if you can refrain from doing so for at least your first year or two in the industry, you may be better prepared for growth. Working jobs yourself, without hiring additional help, is not only a great way to familiarize yourself with your clients and their expectations, but it can also be a great way to build your cash-flows. Adding employees too early can cut your profits significantly, and may actually slow your growth. Working jobs yourself allows you to familiarize yourself with the nuances of the job and invest more capital in the growth of your cleaning company.  

When starting out in the industry as the sole employee of your business, it’s also important to not overbook your schedule. While connecting with and working for clients is important, the quality of work and customer service you provide is equally important. Take on enough work to build your cash flows and get your business moving, but not so much that you can’t meet or exceed the customer’s standards. 

7. Provide Ideal Customer Service

Beyond providing competitive pricing and comprehensive work, a significant portion of your reputation as a cleaning professional is tied to your customer service. In an industry where you will likely enter people’s homes and offices, clean their personal property, and fulfill their miscellaneous cleaning requests, your ability to communicate with and serve the needs of your customers is key. Your clients should trust both your work and your character, or else they wouldn’t be inclined to have you working in their private spaces. Reliable service must be paired with professional, friendly, and honest communication. 

Take care to respond to client requests in a timely manner, keeping track of individual preferences across different homes and offices. By actively listening and responding to feedback, you can cement your working relationships with your clients. Similarly, maintaining an open and easily-accessible communication chain with your clients allows you to pick up work more frequently and build trust.

 

Author Bio:

Jeffrey Bumbales
Director, Marketing & Strategic Partnerships