Starting a house cleaning company can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful house cleaning service.
Importantly, a critical step in starting a house cleaning business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a House Cleaning Service:
- Choose the Name for Your House Cleaning Business
- Develop Your House Cleaning Service Business Plan
- Choose the Legal Structure for Your House Cleaning Business
- Secure Startup Funding for Your House Cleaning Business (If Needed)
- Secure a Lease for Your Location
- Register Your House Cleaning Business with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your House Cleaning Business
- Buy or Lease the Right House Cleaning Business Equipment
- Develop Your House Cleaning Business Marketing Materials
- Purchase and Setup the Software Needed to Run Your House Cleaning Business
- Open for Business
1. Choose the Name for Your House Cleaning Business
The first step to starting a residential or house cleaning business is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a cleaning business name:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your cleaning business.
2. Develop Your House Cleaning Service Business Plan
One of the most important steps in starting a house cleaning company is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your cleaning business.
- Company Overview – this section tells the reader about the history of your cleaning business and what type of cleaning business you plan to operate. For example, will you provide full service residential cleaning services, or other cleaning services such as move in/out cleaning services, window washing or exterior cleaning?
- Industry Analysis – here you will document key information about the cleaning business industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the pricing structure of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract your first customers and more to your cleaning company? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization, advertise in your local paper or local business directories, and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your cleaning company make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your House Cleaning Business
Next you need to choose a legal business structure for your cleaning service business and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal business structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the business owner and the business are the same legal person. The business owner, or sole proprietor, is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of this business structure is that it is simple and inexpensive to establish. The main disadvantage is that the business owner is liable for all debts and obligations of the business. This business structure is most common to a self-employed cleaner.
2) Partnerships
A partnership is a legal structure that is popular among small cleaning businesses. It is an agreement between two or more people who want to start a cleaning business together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A Limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the cleaning business owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a residential cleaning business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a cleaning business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your cleaning business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your cleaning business.
4. Secure Startup Funding for Your House Cleaning Business (If Needed)
In developing your cleaning service business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a cleaning business to consider are personal assets and savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a new cleaning company that they believe has high potential for growth.
5. Secure a Business Location
When you’re starting a cleaning business, you’ll need to find a location for your business. If you are going to rent a space, you’ll want to find a space that is big enough to accommodate all of your equipment and provides ample office space. Once you’ve found a place, you’ll need to sign a commercial lease. It is important that you have a written lease so that both parties are aware of their responsibilities.
You can also operate your business out of your home, if you choose to. You can set-up a home office to manage the business and take appointments.
6. Register Your House Cleaning Business with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a business checking account in your cleaning company’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your business to help you keep personal and business finances separate.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the business name, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
In order to start a cleaning business, you will need to obtain the necessary licenses and permits. Some of the licenses and permits that you may need include a business license, a sanitation permit, and liability insurance.
If you will be using any equipment, such as floor buffers or carpet shampooers, in your cleaning business, then you should check with local ordinances to make sure that you are allowed to use them. For example, some cities require noise permits for certain types of equipment.
10. Get Business Insurance for Your House Cleaning Business
Below are the main types of business insurance to consider for your business:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Auto insurance: If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Cleaning Equipment
To start a cleaning company, you will need to invest in some basic equipment. This includes a vacuum cleaner, mop, and broom. You may also want to invest in some cleaning chemicals and supplies, such as window cleaner, furniture polish, and carpet cleaner.
12. Develop Your House Cleaning Business Marketing Materials
Marketing materials will be required to attract and retain customers to your cleaning business.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your cleaning business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional cleaning business website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your cleaning business.
13. Purchase and Setup the Software Needed to Run Your Cleaning Business
You’ll need to be able to track your clients, schedule appointments, and keep track of your finances. There are a few different software options that can help you do all of this:
- G Suite: This software is made by Google and is great for small businesses. It offers a lot of features such as email, calendar, and document storage.
- Accounting software offered by companies like QuickBooks. Xero or Zoho Books that allows you to invoice customers, keep track of payments and manage your sales and expenses.
14. Open for Business
You are now ready to open your cleaning business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a House Cleaning Business FAQs
Is it hard to start a successful cleaning business?
No, it's easy to start a cleaning business.
It consists of hiring good people who represent you well and treating them like family, providing excellent customer service, booking the right cleaning jobs with the right clients, and negotiating prices for your services consistently but reasonably.
How can I start a residential cleaning service business with no experience?
If you're looking to start a cleaning company with no experience, it's important to do your research. First, you'll need to decide what services you want to offer and create a business plan that outlines your goals and strategies. You'll also need to get licensed and insured, and build a client base.
One of the best ways to get started is by marketing your business. You can also market your business online or through word-of-mouth. Be sure to provide excellent customer service and keep your rates competitive.
Is a cleaning business a good idea and/or a good investment?
There is certainly a lot of potential for profit in this industry; it depends on your specific situation and what you're looking for in terms of a business venture. If you're interested in starting a cleaning business, do your research and make sure you understand all the associated risks and rewards. First, it’s important to make sure that there is a market for your services. Second, you should have a good understanding of what you’re offering and how best you can help your clients. Finally, you need to be prepared to invest time and money into your business in order to make it successful.
What type of cleaning business is most profitable?
The most profitable type of cleaning business is one that offers a full range of services, from basic cleaning to deep-cleaning. This allows you to appeal to a wider range of customers and charge higher rates. It's also important to have a good marketing strategy in place, so you can reach potential customers and let them know about your services.
How much does it cost to start a cleaning business?
The cost of starting a cleaning company can vary depending on the size and scope of the business. Some basic expenses that you will likely incur include advertising and marketing, licenses and permits, insurance, equipment and cleaning supplies, and wages for employees (if you choose to hire them). You can expect your annual expenses to include things like vehicle maintenance, office supplies, and taxes.
Your costs will vary depending on the geographic region you are in, how much it costs for you to rent a space, whether or not you have employees, and how much it costs to buy equipment, cleaning supplies, and insurance. Consider purchasing cleaning solutions and supplies in bulk to help you save money.
What are the ongoing expenses for a cleaning business?
The ongoing expenses for a cleaning business can include advertising and marketing, automobile expenses, insurance, licensing and permits, office and cleaning supplies, and training. It's important to factor in these costs when starting a residential cleaning business to ensure that you are able to cover them on an ongoing basis.
How does a cleaning business make money?
A cleaning company makes money by charging an agreed upon rate for each service performed. The services typically performed by a cleaning company include:
- Window washing
- Cleaning floors
- Vacuuming carpets/rugs
- Washing walls
- Changing bedding and doing laundry
- Doing dishes and kitchen work
A cleaning business can make money by charging an hourly rate for each service performed. Alternatively, they can charge customers for each room cleaned. Sometimes, customers may prefer the flat rate for each service performed and others might want to pay on a square feet basis.
A cleaning business can also be commissioned by other businesses such as real estate companies or property management companies to clean the homes of their clients before and after the clients move in and out of them. In such cases, a fixed fee based on an hourly rate or a per room rate would be set by contract between the cleaning business and the business that commissions them for service.
How profitable is a cleaning business?
The market for cleaning services is growing. People are always looking for ways to make their lives easier through outsourcing or delegating, and hiring a cleaning company allows them to focus on the things they really care about.
Owning a cleaning business provides you with the opportunity to work for yourself. If you live in an area where this service is needed, then it can be very rewarding. As with any business, it takes hard work and dedication to achieve success.
Why do cleaning businesses fail?
Cleaning companies can fail for a number of reasons. One of the most common is that people don't plan properly and don't set up their business correctly from the start. Other reasons include not having enough customers, not pricing their services correctly, or not marketing their business effectively.
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