How to Start a Cleaning Business | Growthink

How to Start a Cleaning Business

commercial cleaning and other cleaning services
 

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Are you interested in starting your own cleaning business? If so, you’ve come to the right place. Below you’ll learn the key steps to start your own cleaning business and how to make it a success.

Importantly, a critical step in starting a cleaning service business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Cleaning Service Business Plan Template here.

Starting Your Own Successful Cleaning Business

Step 1. Write Cleaning Business Plan

The first thing you need to do is create your cleaning service business plan. Without one, your cleaning business won’t be taken seriously and financing options may not be available. The business plan consists of an executive summary, company description, industry analysis, marketing strategy, operations plan, and financial projections.

Step 2. Find and Purchase Cleaning Supplies

Once you have created your business plan, visit local wholesale stores to price out your supply needs (or search online). You can purchase most of the products needed for this line of work from these types of stores at a reduced cost when compared to retail prices at drugstores or grocery stores. Some cleaning supplies you will need are cleaning fluids, vacuums, carpet shampooer, and other supplies.

Step 3: Find or Purchase Cleaning Equipment

A new cleaning company may not require much cleaning equipment to start up. Cleaning equipment may include ladders, mops, and buckets. If these items are not readily available around your home, try borrowing or renting them before purchasing them outright. The last thing you want to do is incur unnecessary expenses when starting a new business. Before preparing to open for business, test run the tools that you will use to make sure they work properly.

Step 4: Take Inventory

Take the inventory of all cleaning supplies needed for business. This list should be added to your cleaning business plan. This is a great way to see if you have everything needed for your business before opening day. You will not be able to open your cleaning business without the necessary supplies and equipment, so make sure you have everything on hand before scheduling your clients.

Step 5: Obtain Licenses & Insurance

Before beginning any cleaning work it is very important that you obtain all licenses and permits required for your local area. Check with your city hall or county clerk for the specific licensing requirements which may include a vendor’s license and a business license.

Businesses also need general liability insurance to protect you from any financial responsibility in accidents that may occur during one of your client appointments.

Depending on the number of employees you plan to hire, you may also need to invest in workers’ compensation insurance. Check with your state’s regulations for specific requirements.

Step 6: Recruit Employees

Your staff is very important to the success of your cleaning business. You will need customer service representatives, cleaners, maids, and other workers depending on the level of cleaning work you are doing. Sometimes, it’s best to hire family members or friends when starting your cleaning business because it will be easier for you to train them and check up on their productivity levels. You can set schedules so that you know who is supposed to clean at certain times and locations. Employees are the backbone of your business, so make sure you hire right!

Step 7: Develop a Cleaning Service Marketing Plan

Start marketing your services one month prior to opening day to begin scheduling residential or commercial cleaning jobs once you are officially open.

There are many ways that you can market your business including flyers, newspaper ads, television commercials, and digital marketing. Some people prefer word-of-mouth advertising by passing out business cards or promotional products with their cleaning business name and number on them to friends, family members, and neighbors.

You will be able to use these customers as referrals once they’ve experienced your services for themselves.

Step 8: Open for Business

Hopefully, by this point, you’ve been able to schedule several cleaning jobs for your opening week. When preparing for this step, remember that even profitable businesses have slow service periods. That’s why it is important to keep your expenses low so you don’t go bankrupt in your first few months.

Step 9: Review & Reassess

After one month has passed you can look back at how much you’ve made and how much you have spent. You can use these numbers to help determine a better business plan for the future. Be sure not to get discouraged if you’re not making as much money as you’d hope after just one month of operation.

If it seems that your business is struggling, you can learn how to run your business more efficiently and cost-effectively.

For example, if the problem is you’re not getting calls, you may need to advertise more. Find free, local business directories where you can add your business. The more visible you are, the more likely customers will find you.

 

How Big is the Cleaning Industry?

The global cleaning industry was valued at $60.25 billion in 2019 and is anticipated to develop at a CAGR of 6.3% to $88.9 billion by 2025.

cleaning service industry statistics

 

What are the Key Segments of the Cleaning Industry?

The cleaning industry is one of the most popular service industries. The industry itself provides services directly to consumers and/or businesses. There are two main segments in the cleaning industry:

Residential Cleaning Services

The residential cleaning business segment is mostly composed of home-based business owners who are in charge of cleaning homes or serving as housekeepers for residential communities or private homes. These households are generally serviced either once every week or twice per month depending on what the client specifies.

Janitorial & Commercial Cleaning Services

This industry makes up about 70% of the cleaning industry.

This segment is known for its high level of professionalism and expertise. Janitorial and commercial cleaners in this sector are called on to maintain the cleanliness of public buildings, facilities, or common areas. Services include restrooms at shopping malls, airports, churches, banks, restaurants, trains/subways stations, etc. Cleaning includes tasks such as sweeping, mopping, dusting, polishing, scrubbing, sanitizing, etc.

These services usually come in the form of regular scheduled cleans, for which the pricing structure is based on time and/or frequency of service.

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Cleaning Service Business Plan Template and complete your business plan and financial model in hours.

What External Factors Affect the Cleaning Industry?

The cleaning industry is affected by a number of external factors. These external factors include:

Economic Sector

The cleaning industry depends on consumer spending to drive revenue. When consumers are more confident about their economic position, they tend to spend more on services such as residential cleaning. As income levels rise, people tend to buy higher quality products and seek out services like cleaning.

Generally speaking, when an economy goes into recession, spending falls across all sectors of the economy, including the cleaning sector. People tend to cut costs where they can during difficult economic times. The cleaning industry has not been immune to this effect in the past.

Global Economy

The cleaning industry is also impacted by the global economy through changes in interest rates, employment levels, and consumer spending. The market largely operates under an international umbrella these days; thus external factors like interest rate fluctuations can also affect the market.

Wage Rates

Wage rates are important drivers for the cleaning industry because it affects revenue for business owners. The cost of labor (including benefits), a major expense for cleaning companies, is directly affected by wage rates. When the minimum wage goes up, so do the direct costs of hiring employees at higher wage rates.

The cleaning industry directly competes with other service industries like the retail and food services industry. When these industries see higher wage pressure, cleaning companies also need to increase wages to attract and retain good employees.

Population Data

Businesses that perform cleaning services on a regular basis are largely dependent on population levels in various geographic areas.

Population growth/decline has an impact on the cleaning market because if there are more consumers, then that means cleaning services demand will go up over time. As populations decline, it could have a deflationary effect on the cleaning market because demand for cleaning falls at the same time as population decline. The cleaning business will also see deflationary pressures on service costs as companies need to decrease cleaning prices in order to become more competitive.

Location

The cleaning market is impacted by geographic location factors like the proximity of the available services to consumers. It is geographically segmented and the location of cleaning providers impacts their ability to serve potential clients within a given area.

The cleaning market faces competition from local businesses who provide the same/similar type of services, the proximity of these companies and their targeted area plays an important role in determining pricing levels for your services.

Competition

The strength of competition varies between sectors within the cleaning industry. Some segments like commercial cleaning or cleaning up services are highly competitive, whereas other cleaning segments like residential cleaning services are less intense. The cleaning market segments vary by type of cleaning business, target market location, demand for services, etc.

Cleaning business owners need to adapt their business strategies based on the competitive environment in which they operate. Businesses who take a low-cost approach to delivering services will find it challenging competing effectively against high costs with small benefits.

 

Who are the Key Competitors in the Cleaning Market?

The cleaning industry is one of the most popular and competitive markets of today. Cleaning businesses face tough competition from three major competitors:

Large cleaning franchises such as Merry Maids offer high-quality services often at a substantially higher price than small companies. They often have a major advantage of having a large amount of capital, which allows them to purchase expensive equipment and tools. Cleaning supplies are also bought in bulk at a discounted price.

Small cleaning businesses are usually run locally, typically by one worker or a family. These companies usually work with other local businesses but some do have the resources to expand across certain regions. At times, these companies don’t offer the same quality services as the larger franchises but do cost less. They tend to focus on a certain neighborhood or home type, while larger franchises tend to focus on commercial or janitorial services.

Home-based cleaners are more familiar to customers and therefore tend to receive more repeat business than either of the other competitor segments. However, home-based cleaning business owners typically don’t have the capital to compete with the larger franchise or have the marketing plan of the smaller businesses.

Another important competitor is the customers themselves, who sometimes choose to clean houses themselves rather than hire cleaners to do it for them.

 

What are the Key Customer Segments in the Cleaning Market?

Small Businesses

Cleaning services are often used by small businesses when they need help with cleaning. These services can help businesses be more efficient and it saves time for small business owners.

Homeowners

Services are also used by homeowners who want to save time and not deal with the hassle of cleaning. It helps keep homes clean and sanitary, which is especially helpful for those who have allergies or those who use their home as a business space. These services can be a time saver and a sanity saver for working professionals, parents, and other homeowners. 

Seniors & Retirees

Cleaning services are a popular choice for retirees who have a limited amount of time or mobility to clean their homes. Cleaning can help reduce stress and senior citizens can enjoy more free time doing the things they love. In most cases, services also fit nicely into a fixed income.

Large Corporations

Cleaning services are also used by large corporations that have employees working long hours. These services can provide a way for employees to have a clean and sanitary work environment where germs and bacteria will not spread. They can help large corporations save money and time.

 

What are the Typical Startup Costs for a New Cleaning Business?

According to the Cleaning Industry Association, the average startup cost for a cleaning service is between $2,000 and $6,000. This number can be as high as $100,000 or as low as $1,000 depending on the number of supplies and equipment needed to purchase.

Startups that rent equipment and supplies will obviously have a higher cost than those cleaning businesses that use their own equipment and supplies.

 

What are the Key Costs to Launching a Cleaning Business?

If you want to run a cleaning service as a side-hustle, you will have fewer fixed costs and can probably get going for less than $1,000. If you want to run a cleaning company as your main income, you may need as much as $50,000 or more to cover the costs of hiring staff and buying equipment.

Here is an overview of the largest expenses for a cleaning company:

Storefront Lease

A cleaning business typically rents a storefront or office to run the business. Rent can vary from $500 to several thousand dollars depending on where you are located and the size of the premises.

Cleaning Equipment

Cleaning businesses typically buy a range of equipment including mops, buckets, brushes, brooms, vacuum cleaners, cleaning chemicals, brooms, and a pressure washer. Businesses typically spend between $1,000 and $10,000 on equipment depending on their size and whether or not they have employees.

Staff

Cleaning business owners typically hire staff at day rates that vary but average $15 per hour. Full-time staff may also require benefits. Typically, a cleaning business owner needs to retain a ratio of one cleaner for every four regular clients.

If you’d like to quickly and easily complete your business plan, download Growthink’s Ultimate Cleaning Service Business Plan Template and complete your business plan and financial model in hours.

How Much Do Cleaning Business Owners Make?

The average salary of cleaning company owners is $55,000 annually. However, the owner’s salary increases when they manage several cleaning businesses at the same time or work more hours.

 

What are the Keys to Launching a New Cleaning Business?

If you’re thinking about starting a cleaning business, here are the keys to getting your business up and running.

A Solid Cleaning Business Plan

A solid business plan is necessary to introduce you and your cleaning service business to any outside investors or lenders, as well as for your own management purposes. Your plan should include information about your mission and vision, service offerings and methods, marketing strategies, potential risks, labor costs, hiring process, financial projections, and initial investment requirements.

Develop Excellent Cleaning Teams

A cleaning service cannot operate without employees to clean homes or offices. Some businesses hire full-time employees who work exclusively for them, while others hire subcontractors or temps to fulfill their cleaning services.

Cleaning Services Insurance

Whether you are hiring cleaning employees or contracting with cleaning sub-contractors, it is important to purchase the appropriate business insurance for your cleaning business. Business owners are typically required to carry some form of general liability insurance, but what type of policy you need depends on how many employees you have and whether they will be working full time for your cleaning service business or independent contractors hired through a temporary employment agency.

Proper Cleaning Equipment & Supplies

While the business owner can purchase chemicals and equipment from a local retail store, many save money by purchasing bulk supplies online. Cleaning businesses should also invest in high-quality equipment such as mops, buckets, brushes, brooms, vacuum cleaners, and pressure washers that will not need to be replaced frequently.

Marketing Your Cleaning Business

One of your most valuable resources is an established network of referrals. The more happy customers you have telling friends and family about your cleaning business, the faster you can grow your business. Below are some tips for marketing your new cleaning company:

  • Build a Cleaning Service Website
  • Leverage Social Media to Get the Word Out
  • Make Connections with Real Estate Professionals

 

How to Finish Your Cleaning Service Business Plan in 1 Day!

Don’t you wish there was a faster, easier way to finish your cleaning business plan?

With Growthink’s Ultimate Cleaning Service Business Plan Template you can finish your plan in just 8 hours or less!

Click here to finish your cleaning business plan today.

 

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.

Click here to see how a Growthink professional business planner can create your business plan for you.
 

How to Start a Cleaning Business FAQs

When deciding how many people to hire for your cleaning service business, keep in mind that there are often some general rules of thumb. Start with the requirement that each person does a specific task, so you don't end up with two people trying to tackle one job on their own. The more cleaning tasks you have - dusting, laundry service on-site for mats or towels, work outside of office hours, etc.—the more agents you will need.

The number of cleaners starts at 1 on smaller contracts and jumps up to 2-4 cleaners on larger contracts where the workload cannot be handled by one cleaner alone. Managers are always recommended if the budget allows for it because they can provide oversight flowing through all departments including training future cleaners and cleaning services.

It can be difficult to start a cleaning business from scratch with little or no money. Services that cost the least amount of money to start will likely be those with low liability and high demand. 

Cleaning services like these might include:

  • Clean up after holiday dinners
  • Clean up after a major house fire
  • Clean out homes for those who are moving
  • Clean out garages or sheds
  • Clean out vacant apartments

Alternatively, you could start a cleaning business doing tasks such as:

  • Dusting furniture and removing cobwebs from walls
  • Cleaning bathrooms and kitchens
  • Vacuuming and mopping floors

There are a few ways to find potential customers for your cleaning company. One is to decide what niche market you want to specialize in. Niches are usually very profitable, so it's best to have a narrow focus. Cleaning companies typically fall into the following niches:

  • Residential House Cleaning Service: Offers residential house cleaning services
  • Commercial Cleaning Service: Offers office or commercial facility cleaning services
  • Disaster Cleaning Service: Offers clean up or disaster relief services
  • Home Helper Service: Offers elderly or disabled person around-the-home care

Another way to find potential customers is through networking with other cleaning business owners. For example, you could attend a cleaning industry conference or join an online forum where local owners share their experiences and advice.

You also have the option of running print or online ads to promote your business. Make sure that you track where your customers are coming from so you can determine which marketing strategies are working best for your target market.

A cleaning company can employ various types of staff including an office manager, receptionist(s), and cleaning associates.

The office manager is responsible for the daily operations of the business. They typically handle hiring and firing associates, training, payroll paperwork, monitoring associate performance, marketing strategies, product sourcing, and dispensing supplies.

The receptionist(s) for your business will be responsible for answering the phone, answering potential client questions, and scheduling cleaning services. They may also assist in other administrative or clerical duties to support the office manager.

Cleaning associates are the employees who actually carry out the services provided by your company. Business owners should also hire independent contractors or contract with another specialized local business for customer inquiries for professional services including air duct, chimney, and window cleaning.

The following are some basic supplies that a cleaning company may use:

  • Cleaning rags (old clothes or cloth)
  • Cleaning chemicals (e.g., bleach, pine oil)
  • Green cleaning supplies (e.g. fragrance and chemical-free cleaning products)
  • Sponges
  • Cleaning fluids (those used in steam cleaners)
  • Cleaning solutions (those made for specific surfaces like granite countertops)
  • Cleaning tools like brooms or scrubbing brushes
  • Clean masks or safety masks

 

Helpful Videos

5 Don’ts of the Cleaning Business


 

How to Start A Cleaning Business 2021 [Detailed Information]


 

How To Market Your Cleaning Business (5 PROVEN STRATEGIES!)


 

Additional Resources

Ask a House Cleaner

Resources for Cleaning Companies

Cleaning Business Supplies Checklist
 

Other Helpful Business Plan Articles & Templates