Are you considering starting your own cleaning business? Learn what you will need to do to be successful by reading this article.
Step 1: What type of cleaning business?
Before you can take any other steps, you must first decide what type of cleaning business you want to start.
Commercial or Residential
There are many different types of cleaning businesses. The biggest decision is whether you want to be a commercial cleaning business or a residential cleaning business.
Commercial cleaning services clean for large buildings, typically include some form of contract, and usually come with more square footage to clean. All of this means that commercial cleaning companies tend to be bigger than residential cleaning companies and require more employees, equipment, and upfront capital to start a company. Commercial cleaning companies can include one or many different types of cleaning specialties such as glass cleaning, carpet cleaning, post-construction cleaning, emergency cleaning, and more.
Residential cleaning services usually clean someone's house. Again, these companies may specialize in one or many types of cleaning services: general house cleaners, carpet cleaners, blinds cleaners, window cleaners, office cleaners, chimney sweepers, and more. Residential companies tend to have many clients with varying cleaning cadences and have less formality around the cleaning contract than commercial cleaning companies have with their clients. If you want to start small or already know some residential clients near where you live, launching a residential cleaning company is a great place to start.
Name and Brand
Name and brand are more important than you might think, and they go hand in hand! You want to select a name that is memorable, showcases your professionalism, and unique.
Memorable names keep you front of mind for your clients, and most importantly, when a client recommends you to someone else, they'll remember who to recommend. While it can be tempting to pick a funny name for memorability, it's usually better to err on the side of professionalism. When picking a new name, do some Googling for cleaning companies in your area. You want to avoid a name that sounds too similar to another company's name or you'll risk confusing clients and hurting your Google rankings as you compete against each other.
Defining your brand requires creating a company logo and selecting your company's new colors. There are a few ways you can do this: 1. with a designer or 2. using online tools. If you choose to work with a designer, you can work with someone you know or find a freelancer through Upwork or Fiverr. If you use online tools, AI-powered companies like BrandMark for logos, Coolors.io for colors, or Parade for colors and typography can help you build the perfect brand in minutes.
Step 2: What legal steps should you take?
Taking care of legal stuff isn't very fun, but it's important that you take care of it early. If you don't, you risk legal ramifications that can cause headaches and financial concern. Determining how you want to form your business, obtaining local licenses and certificates, and insuring your company are a few critical steps to take. As a disclaimer, this article is informational and not meant to be taken as legal advice.
You can form your company a few different ways: as a sole proprietor, as a corporation, or as a Limited Liability Company (LLC). Sole proprietorships tend to be the easiest to set up, but you're personally responsible for business liabilities. LLCs provide some liability protection but require work to remain in good standing. C-Corps also require fees and documents to stay in good standing and tend to best fit larger companies. Online legal tools such as LegalZoom can help you decide what business type you'd like to form and guide you through the incorporation process from a legal standpoint.
In most places, you'll have to obtain a vendor's license which allow you to legally operate and to correctly file taxes each year. You can search your state's government website to find a vendor license application and any local permits. You can use a tool like LegalZoom again to provide some peace of mind that you've done everything correctly.
Nationally recognized cleaning certificates such as Cleaning Management Institute (CMI) or Cleaning Industry Management Standard (CIMS) & Certification can help provide some credibility to your new company. Certificate programs tend to be more beneficial for commercial cleaning companies and can have a fairly hefty price tag.
Insurance helps protect you and your clients whenever things go wrong. The most common type of insurance to consider is general liability insurance which can cover bodily injury or property damage that happen during a clean. Some clients, especially if you decide to become a commercial cleaning company, may require you to have liability insurance before you clean for them. You may also want to consider workers compensation insurance if you hire employees and Business Owners Policy (BOP) if you have an office, which combines general liability insurance with property insurance for your business.
Step 3: What financial considerations should you have?
Starting a company requires you to make several financial decisions that will impact the long-term success of your company. Fortunately, you can (and should!) review these decisions over time, and here are some tips to get started with pricing your jobs, budgeting, and accounting.
There are many different strategies you can use to price your jobs; however, we recommend starting somewhere in line with other competitors in your area. If you price too cheaply, you're leaving money on the table and not getting your full worth. If you price too expensively, you'll struggle to find clients that are willing to pay.
Many cleaning companies estimate job prices based on a price per square foot, number of rooms, or estimated hours to clean. Charging a flat rate is not advised as situations can vary so dramatically. Do some googling for companies in your area and see if you can determine their business structure. Facebook groups for cleaners can also provide some advice for what is considered reasonable or not, although keep in mind that this will change from location to location.
Once you're up and running, you can adjust pricing. If you're overflowing with clients, consider raising your prices. If you're struggling to fill your schedule, consider lowering your prices or offering an initial customer deal. Pricing isn't an exact science, so make an educated guess to get started and refine over time!
The long-term success of your new cleaning companies depends on your ability to make more money than you spend! Budgeting how much expected income you'll receive each month and how much you plan to spend can greatly help you. Over time, you can compare your actual numbers to your budget to see if you should make any changes to your budget assumptions.
To create a rough budget, consider the following:
- Income: given your pricing, estimate how many jobs you will complete each month and how much you plan to charge for each job. Keep in mind that it may take a few months or longer to ramp up to full capacity.
- Fixed Costs: some costs are fixed at a set price each month regardless of how much you use it. Some examples include rent, insurance, and business management software. These will stay the same regardless of how many clients you have.
- Variable Costs: other costs change in correlation with the number of clients you're serving or amount of use. Examples include cleaning supplies and utilities.
- One-time Costs: you'll likely have to take care of some startup costs like purchasing vacuum cleaners, buckets, paper towels, or other cleaning supplies. Make sure to include these one-time costs in your budget.
- Taxes: these will vary depending on how you decided to incorporate.
Using these categories, you can roughly estimate Income - Costs - Taxes = Net Income.
It's important to keep clean books from the beginning. You don't want to retroactively chase down revenue and expenses, and you certainly don't want to face any legal ramifications from the IRS for poorly kept accounting. Using a tool like QuickBooks can provide you with everything you need to get started and to keep your accounting in line.
Step 4: How do you prepare for day-to-day operations?
While you may be legally ready to do business, you still need to work through how to manage day-to-day operations. This means ordering and maintaining supplies, scheduling jobs, and invoicing customers.
You'll need to order an initial batch of cleaning supplies. Once you have that set of supplies, start tracking how long it takes you to run out and how frequently you need to reorder. Before you run out, make sure to place an order for more supplies.
Over time, you should notice your reordering frequency start to stabilize, and you can begin to batch your reorders per some period of time. For instance, you may use 6 bottles of a multi-purpose cleaner, 8 rags, 3 mops, 2 brooms, and 10 pairs of latex gloves every three months, so now, you can plan to purchase those quantities in bulk quarterly.
It's better to have a few extra cleaning supplies on hand to avoid the inconvenience of running out; however, avoid the temptation to have too much on hand. This can lead to cluttering and make managing cleaning supplies more difficult.
Scheduling, Invoicing, and Payments
Having some form of scheduling and formal invoicing will make you and your employees lives much easier. The most basic form of scheduling is pen and paper or a whiteboard in your office while invoicing could be done on paper and mailed to clients.
However, these manual tactics tend to lead to mistakes, and they aren't very accessible to employees and clients. We recommend using Google Calendar if you want a free scheduling option. If you're willing to pay, QuickBooks can help with invoicing, and some software such as Jobber can help you manage your scheduling and invoicing all in one place.
Step 5: How do you find you first clients?
You've done all the foundational work, now it's time to find your first clients! You can use many different tactics, and we've outlined three of the most popular.
Long gone are the days of thumbing through the yellow pages to find your local cleaning company. Creating an online presence will help you reach more clients than you otherwise can. Here are some tips:
- Create company pages on Google My Listing, Yelp, social media like Facebook and Instagram, and more. People can easily find you when they search for a local cleaner.
- Build a professional website! According to a Stanford University study, 75% of people judge the credibility of a company based on the design of its website. If you don't already have one, our website builder tool can help you create one in just 10 minutes.
Word of Mouth
Although the world is becoming more digital by the minute, word of mouth still brings in high quality leads. Let your friends and family know that you're starting a cleaning company and see if they know anyone who would be willing to book your cleaning services. When you do a great job, which we know you will, those people will be more likely to refer you to others that they know and so on.
Sometimes, some good old fashioned paper marketing can do the trick. You can use tools like Inkit to send direct mailer flyers to thousands of people at a relatively affordable cost. Lawn signs, door hangers, and flyers with your contact information can help get the word out to people in your local area. Consider including a one-time promotional deal for new customers such as 30% a cleaning to incentivize people to give you a shot.
Step 6: How do you stand out from your competition?
Having impeccable customer service is the key to standing out from your competition.
Treat your customers as family, and you'll be rewarded in the long run. Companies that focus on their clients have happier clients who promote them for free and keep returning. That means (1) you need to spend less money on advertising to receive the same number of new leads, (2) you need to close fewer new leads to maintain the same amount of income each month, and (3) you can focus more intently on the high quality customers you have, making them even happier. It's a positive feedback loop that will make your company more successful in the long-run even if it means making a sacrifice or two in the short-term.
Get started today!
We're excited for you to become a cleaning business owner. Whether you need a new website or a separate business phone line to manage your clients, ProPhone has you covered. We're here to support you because your success is our success.