Everything You Need to Know About Starting a Cleaning Business
In 2020, 59.8% of married-couple families with children in America had two working spouses. Because of this, the cleaning industry is expected to expand. That means now could be the perfect time to begin a cleaning business.
But it can be difficult to know where to start. Let’s take a look at the key steps you should consider taking when starting your new cleaning business.
Benefits of Starting a Cleaning Business
A cleaning business is one of the easier, more streamlined businesses you can start. It has low overhead and not many operating costs. Plus there are low upfront costs and relatively consistent demand.
You can start a cleaning business without much capital and gradually build and expand your business over time. There aren’t a lot of barriers to entry for the industry. Having a good work ethic and building relationships with customers can help you maintain and grow your business.
Do Some Research
Once you decide to start a cleaning business, you need to do some research. Start by looking at what competition is in your area is. You want to figure out how you can carve out a section of the market for yourself.
Research what other cleaning companies offer as their services and who their main clients are. You should also look at the way they advertise themselves to get an idea of what is successful.
Before starting a cleaning business, you should also make sure you definitely want to pursue this field. If you know someone who would be willing to allow it, ask if you can accompany them on a job.
You can also offer to do a free cleaning for friends or family in exchange for feedback. Make sure that what you are offering is what your potential clients are looking for. This can even give you some insight into the day-to-day operations and skills that are needed.
To Franchise or Not
There are two main options when it comes to starting a cleaning business: you can start one all on your own or you can start it via an existing cleaning franchise. Both situations offer their own benefits and drawbacks, so it’s important to thoroughly consider both.
If you join a franchise, there will probably be a larger upfront cost and you’ll have less control over your business.
However, you’ll have less to figure out and manage on your own. A franchise offers the benefit of brand recognition right from the start. This may make it easier to advertise and find new clients.
The franchise may also already have policies and procedures in place that can make starting your own business easier. Think about both options and try to decide what would be the best move for your situation and goals.
Choose Your Services
Choosing the services you will offer is another key part of starting your cleaning business. Start by looking at what other cleaning businesses in the area offer and which services their clients are interested in.
You should also consider any specialized skills or resources that you have. You can offer anything from light home cleaning to specialized services such as carpet cleaning or pressure washing.
The services you offer will also be dependent on what types of clients you want to primarily work with. You could be a residential cleaner and work only with clients and their personal residences. This is especially popular for cleaners who are independent.
Or you could have a commercial cleaning service. A common example of this is a janitorial service that has contracts with state or corporate entities.
You should also consider what kind of schedule you will offer. You could keep set weekly appointments with clients. Or you could offer short-term or one-time services instead. You could also offer a combination of schedules depending on your clients’ needs.
Create Your Business Plan
You need to figure out how you will run your business before you start. If it’s only you in the business, your operations will look a lot different than if you have a team involved.
Start by creating a name for your business. This will become an important part of your marketing and branding. Reflect on your services and anything else you’d like to include in your public image.
Also start to draw up a list of any supplies and cleaning equipment you may need. This is quite easy to overlook, so writing it down will help with making sure you don’t forget anything.
Your business plan should also list out your chosen services and any specialties you will focus on. Figuring all of this out is not only helpful in planning but may also be required if you need to obtain financing.
A separate section of your business plan should focus on the legal and financial aspects of your business as well.
Permits and Licenses
Many municipalities require a business license or permit to operate legally. It is vital that you consult both your local and state governments to make sure you are meeting these requirements. Failure to do so may mean closing your business.
Obtaining a business license and permit usually involves completing some paperwork. You may need to provide your business name and business plan to the issuing entity. Some agencies also require you to pay a license fee. You could be required to pay a fee when you file your business name as well.
Running a business also means you need to figure out the legal aspects of how you will operate. When you are just starting, you could choose to operate as a sole proprietor on your own. If you’re working with someone else, a partnership may be a good route.
However, you may want to consider setting up a limited liability corporation. This allows you to separate your business and personal finances and also offers some legal protection. You can always start as one business form and switch to an LLC in the future.
Get Cleaning Business Insurance
Insurance is key to making sure you, your employees, and your clients are financially protected if anything goes wrong. You’ll need to think about a number of different options depending on your situation.
One type of insurance you should consider is general liability insurance. It could help to protect your business against lawsuits for third-party damages or bodily injures caused by your business. Some clients may even ask to see your proof of insurance before hiring.
You may also need to consider property damage insurance if you have business equipment or supplies. It could cover losses due to common events like fire or theft.
Purchasing a Business Owners Policy can make it easy to make sure you are covered for both general liability and property insurance. This type of policy combines multiple areas of coverage, including both general liability and property insurance into one policy. A BOP from PolicySweet® even includes cyber insurance to help protect your business in the event of a cyber attack.
If you have employees, you may want to consider Workers' Compensation insurance. This covers medical expenses and some lost wages if an employee is hurt on the job. It is also required in many states.
Figure Out Your Finances
When you are starting a business, creating a budget is key to making sure you can cover all your costs and still pull in a profit. Your budget will initially need to include both start-up costs and operating costs. However, you can create two separate budgets if needed.
Luckily, you can keep start-up costs relatively low when starting a cleaning business. Unlike some other types of ventures, this means you can avoid taking out loans or going into debt. But it will depend on how you are planning on approaching your business.
When starting out, you can advertise mostly by word of mouth. You can purchase cleaning supplies from local stores you already shop at, especially when they are on sale. Focusing on consumer cleaning tends to have lower initial costs.
In both your start-up and ongoing budgets, one of your biggest expenses might be cleaning supplies and related products. This might include mops, gloves, brushes, cleaning agents, and towels.
Once you determine exactly which products you need, you may want to consider purchasing them either directly from the manufacturers or from bulk retailers.
Many people also forget to include the cost of insurance, business licenses, and permits in their budgets. You may also want to include a line for advertising, depending on how you plan on finding your initial clients.
Now is also a good time to research your new tax situation. When you own your own business, most of the time you need to report your income and file quarterly taxes with the IRS. Discussing your financial situation with an accountant can help you start on the right foot.
Banking and Payments
You need to open separate bank accounts that you only use for your business. This will make it much easier to track your finances and may be a requirement depending on the way your business is legally structured.
Start by opening a checking account. Your local bank or credit union is always a good place to start. Later on, you can add a savings account or dedicated checking account for taxes.
You will also need to think about how much you will charge for your services. Your rate will be different depending on where you are located, your competition, and the services you offer. Make sure your price covers your costs and time while remaining reasonable.
You can choose from a few different pricing methods. Many cleaners charge by the hour or by the square footage of the area. However, you may want to price at a flat rate.
You also need a way of accepting payments. You can start by accepting cash and checks since this is an easy option that is relatively accessible.
However, having a way to process credit card payments can make it easier to accept payments. Just note that there are often fees associated with taking credit card payments.
Once you have all of the planning out of the way, you need to start finding clients. Starting with word-of-mouth advertising is particularly valuable in the cleaning services industry. People want to know you do a good job and are trustworthy since you’ll be in their home or business.
Word-of-mouth is also great as it is a low-cost way of gaining clients. Ask happy past clients to pass on your card or name to friends and family who may be interested. You should also ask them for written referrals that you can use later.
You can even build an online presence without having a website. A Facebook page with your up-to-date contact information is vital for helping people find you and learn more.
You can sign up for platforms such as TaskRabbit, Handy, and Care.com. These sites can help you collect reviews and build a good reputation while also making it easier for new people to find you.
Later on, you can expand your advertising by creating a website. Post your reviews and recommendations. Google My Business can also help with getting additional reviews.
Start Your Cleaning Business Today
Starting a cleaning business is a great way to have your own business with relatively little hassle and few start-up costs. Plus the process is straightforward but offers many ways for you to make it your own.
Get an insurance quote from PolicySweet today to make sure your new cleaning business is protected.