How to Start a Cleaning Business: A Complete GuideService Businesses
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If you want to learn how to start a cleaning business, you have come to the right place. It takes a lot of hard work, strategic planning and quality business practices to make it work. Many people seem to enjoy searching for the best online business ideas that they can work on from home. Conversely, others simply want to work on or in the homes and offices of others and get paid to do it. The most important point that you must realize, though, is that it can work.
Keep in Mind: The janitorial service industry reached $61 billion in value in 2018, according to Statista. Whether you want to start a house cleaning business from scratch or even run a commercial cleaning business franchise, you have everything that you need to get started below:
Focus on Accountability and Organization
Before you can dive into the world of business cleaning services, you must first focus on the value of accountability and organization. These skills present immeasurable value in any business, but specifically, one that focuses on this type of work.
Did You Know? Studies show that you should even have an accountability partner to keep you focused and driven from start to finish. According to Entrepreneur, one study showed that people increase their chances of meeting a goal by 65% if they commit to another person.
Pro Tip: In addition to staying accountable and organized in your personal and professional life, your clients will depend on you to literally keep their workspace organized or you will be held accountable. It is very easy to think, “Sure, I can start a commercial cleaning business and make a living.”
However, as any successful cleaning business owner will tell you, achieving this goal is much easier to say than do. As referenced above, though, it is possible if you maintain these two qualities as the cornerstones of each part of your developing company.
Establish Expectations, But Remain Realistic
Another important step to take in the beginning stages of building your cleaning business is to establish your level of expectation. No one should enter a business project believing that it will become financially sound and successful overnight.
Good to Know: As mentioned above, it will take a lot of time and hard work to build your cleaning business. You should put a special emphasis on the word “time” in that sentence.
This does not mean you should lose hope or feel that a slow start means you should stop. On the contrary, you should focus on the concept of progress overall. As the old saying goes, you cannot have progress without struggle. View every sign of progress and growth as a small victory.
However, it will start with making sure you start the cleaning business the right way. There are no shortcuts to long-term success. Below is the path that you should take:
Choose a Name and Specialty for the Business
A name for your cleaning business may seem like a small thing, but there is much more to a business name than you might think.
Did You Know? Multiple studies show that you should pinpoint the focus of your cleaning business before you name the company. For instance, what type of cleaning will you provide? If you want to provide a wide range of services over time, that is fine. However, your name should speak volumes about the core of your company.
Pro Tip: Remember, that everything about your business – including your online presence, marketing materials and overall reputation – will be connected directly to your name and brand. For instance, according to Inc, choosing a name that is dull and unoriginal “communicates a lack of enthusiasm” towards your cleaning business. Therefore, it is highly recommended for you to not rush into selecting a business name. Take your time, do your research and even consult with your accountability partner for the best results.
Bonus: You may not hit the “jackpot” of business names with the first attempt, but there is nothing wrong with that. A solid business name can be a result of progressive tweaks and modifications as you grow.
Focus on Your Target Market & Unique Contribution
Chances are that you more than likely have identified your target market by this point of the process. For instance, you probably know whether you will start a house cleaning business or commercial cleaning business. On the other hand, your interest may be in taking the ambitious route to specialize in the full spectrum of business cleaning services. Either way, once you identify your target market and key demographic, you should shift your focus towards identifying what will make your cleaning business unique.
Pro Tip: Regardless of the market that you select, there is already a vast number of competitors in your area with the same target in mind. You need to spend quality time determining the unique contribution that your company will make to the industry. What sets you apart from the others? Once you have answered that question, you are prepared to proceed with the formation of your cleaning business.
Get Business License, Permits & Other Required Forms
At this point, you have your company name, target market and the unique factor that sets you apart from all others. The next step is to make it official with the required documentation.
Pro Tip: First and foremost, you may need to apply for a business license to operate your company within your city.
Did You Know? According to the Houston Chronicle, you may not be required to have a business license in your state. There are some states that only require the payment of state taxes along with a business bank account. However, you need to take the necessary steps to find out what applies to your situation.
Bonus Tips: You also need to determine which type of business license you need, because there is a variety of types available.
- From food and construction to auto sales and real estate, make sure that your licensing and any other applicable documentation relates to the professional cleaning industry.
- Keep in mind that there are many high-quality resources available online that will provide you with the documents, applications and various forms that you need to start a cleaning business.
For instance, there are even some providers that will provide you an instant kit of documents and forms that you will need.
Consider All Vehicle Options for Your Cleaning Business
You must also avoid rushing into purchasing a company vehicle right away. When most people think of cleaning businesses, one of the first things that may come to mind in addition to the uniform is the company car seen traveling from client to client.
Pro Tip: The expectation differs from the reality, though, and that is what you must consider a top priority when it comes to this aspect of starting your own cleaning business. For instance, say that you want to learn how to start a cleaning business with no money. Obviously, buying a new or used car as a company vehicle would not be a feasible option. Therefore, you should consider all available options when it comes to how you will transport yourself from client to client.
For Example: Why not use your own vehicle for personal and professional needs? There are many benefits to using magnetized signs that advertise your business on your vehicle during your “work hours.”
Good to Know: If you want to expand the decals into vehicle wraps, according to the Houston Chronicle, you should first research your local city laws to ensure that you are not violating any of them by doing so. You may decide to invest in a company car, truck or van in the future.
There are many other areas to which you should invest your starting capital besides a company vehicle – especially if you do not have very much capital to work with in the first place.
Warning: Just make sure you do not try to “cheat the system” by classifying your personal vehicle as a company vehicle. Doing so is a quick way to get audited by the IRS.
Decide on the Business Type and Formation
Will you have a sole proprietorship, limited liability corporation (LLC), or corporation? Keep in mind that an LLC would provide you with more legal protection than if you were to carry the full burden of a sole proprietorship. Take time to research all business types to make sure you invest the appropriate structure for your cleaning business.
Pro Tip: You should also consider franchising a cleaning business that is already established. You will still be able to run it as your own business, but a lot of the “grunt work” would already be completed for you.
Good to Know: Even if you decide to franchise a cleaning business, you will still need to form the business entity that will run it behind the scenes – which is where the above-referenced business types will come in handy.
Remember to Get Your EIN
When starting a cleaning business of any type, you should apply for an employer identification number (EIN) from the IRS. At first, your cleaning business may run as a one-person operation and you may not have any employees to worry about at all.
Good to Know: As you grow your cleaning business with time, that EIN will come in handy more than you realize. Since you already must fill out a lot of forms to establish your business, you might as well get this step out of the way now as well.
Apply for Liability Insurance to Protect Your Business
Liability insurance will protect you and your future employees/contractors while on the job in addition to your client’s property. The last thing you want is to liquidate your assets just to cover the cost of accidental losses and perils that may unexpectedly arise at any time in this line of work.
Pro Tip: Having a quality liability insurance policy will soften the blow and provide you and your cleaning business with top-notch protection just in case you ever need it. A good recommendation to save time (and potentially save money) is to see if your existing insurance carrier offers commercial liability insurance.
Bonus: You should also check with insurance brokers, because they can assist you in generating quotes from multiple companies instead of one at a time.
Open a Bank Account, Create a Bookkeeping System
In addition to liability insurance, your cleaning business will need a business bank account set up. Never try to use your personal bank account as your business account – especially if you have formed your residential and/or commercial cleaning business as an LLC or corporation.
Good to Know: It is vital for you to separate your personal charges and expenses from your business charges and expenses to avoid substantial penalties, punishments and fines from the IRS and your state government.
Pro Tip: Keep in mind that business expenses are tax-deductible, which will come in handy at the end of the year when you are working on your income tax returns. You will also need to determine which bookkeeping system you will use as you start a cleaning business. For example, will you use bookkeeping software (i.e. QuickBooks) or handwritten documentation in your check registers and other printable logs?
Once you have established your business bank account, you should also make sure that your accounting system is intact.
Consult an Attorney and Accountant for Guidance
It may not be necessary (or even affordable) for you to retain an attorney or hire a fulltime accountant to manage your books throughout the year. This does not mean you will not be able to seek guidance from them on a consultation basis.
Good to Know: Quite a few attorneys offer free initial consultations – presenting you with a solid opportunity to get all your questions answered without signing on the dotted line first. For instance, according to Business News Daily, there are some business bank account offers that waive monthly fees for customers if they stay above a specified minimum balance requirement.
Pro Tip: Consulting with an accountant and attorney will help you to read between the lines and ensure that you continue protecting your own reputation and the success & survival of your home or commercial cleaning business.
Develop a Calendar System for Scheduling Appointments and Prospecting
The lifeblood of your home or commercial cleaning business is your schedule. From prospecting new clients and training new employees to mapping out your own work schedule and objectives for the week, your business will live and die by your schedule.
Pro Tip: Make sure that you use or create a calendar system that is easy to use, simple to train and effective at fulfilling its purpose week after week & year after year for your cleaning business.
Do Research, Research and More Research
Research will continue to serve as a high-value commodity for your cleaning business. Whether you want to learn how to start a cleaning business or simply breathe new life into your existing company, you should fall in love with conducting thorough research on the industry.
For Instance: You should focus on just how long it will take for you to clean the average home or workspace. Focus on spacing limitations and square footage as you complete your calculations.
- You should also research the rates and pricing packages currently offered by your competitors to ensure you developing a price list with a competitive edge that will set your company apart from all others in the area.
- Another important topic to research is the supplies and tools that you will need as you start your cleaning business from scratch.
- From glass cleaners and squeegees to dusters and furniture polish, you should consider the full spectrum of your equipment and tools.
More importantly, you want to make sure that you do not go broke investing in high-price supplies when generic alternatives would work just fine.
Develop Your Business Plan to Create a Roadmap for Your Business
Every successful business starts has a well-documented business plan created by the owner and/or management team in the early stages of the company’s development. As you work on your cleaning company’s business plan, remember to view it as a roadmap designed to get you started and on your way to great things.
Good to Know: As is the case with any type of business, your business plan will serve as a roadmap. However, you must be the person driving it forward. Keep that in mind as you work out the various details of your upcoming business plan.
Create Your Fee Schedule and Service Price List
You must create a competitively-priced fee schedule for your cleaning business as it will help to set the stage for your client appointments and overall sales-related interactions. Each business will have its own start-up costs, overhead expenses and recurring fees.
Pro Tip: Make sure that your fee schedule and service price list consist of amounts that are high enough to appear valuable but low enough to remain undetected under the “red flag” radar.
Work on Your Advertising Campaigns and Strategy
As you work to start and expand your cleaning business, do not forget the value of effective advertising and promotion. One great idea for new customers is to offer referral discounts to new customers.
Pro Tip: You should also establish a simple website and social media presence that is updated regularly to continuously drive traffic to your company’s online presence. It is also recommended for you to place basic advertisements in community papers, local papers and other circulating resources that will not charge you an arm and a leg just to see them.
Remember to appreciate the value of superior customer service in the world of residential and business cleaning services. Doing so will help you to take a giant step towards your dreams and overall vision of owning a cleaning business.
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.