How to Start a Cleaning Business

Part 1 - How to start a Cleaning business - Background

This business operates through individual cleaning service contracts between the company and an individual or business. Customers can be either residential, commercial, or both. A cleaning service exists to help ease the burden of cleaning and maintenance for a client, whether it is an office, industrial building, or a home.

You may also be interested in additional low cost business ideas.

Our guide is in 3 parts:

• Part 1 - How to start a Cleaning business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a cleaning business?

A cleaning business can be started on a “shoestring” budget with basic and general cleaning supplies available at any grocery or hardware supply store. Some basic supplies you’ll need include: garbage can liners, spray bottles, trash bags, buckets, feather dusters and dusting rags, mops, toilet brushes, paper towels, squeegees, general or all-purpose cleaners, toilet-specific cleaners, floor cleaners (including supplies for cleaning wood flooring), and liability insurance.

Aim for between $500,000 to $1,000,000 in liability insurance. Larger amounts will be necessary for corporate clients.

In total, your startup costs should not exceed $1,000 for a basic cleaning business.

If you are starting a larger operation, your costs could include professional service vehicles and a cleaning crew. A fleet of vehicles could cost between $10,000 and $30,000, depending on the vehicles you use and whether you buy new or used.

Read our cleaning business purchasing guide to learn about the materials and equipment you’ll need to start a cleaning business, how much to budget, and where to make purchases.

What are the ongoing expenses for a cleaning business?

Ongoing expenses include costs for cleaning supplies, insurance, and vehicle maintenance. These costs vary entirely based on the size of your business and types of contracts you secure every month.

A small company may only spend $500 to $1,000 in cleaning supplies. However, large commercial operations spend tens of thousands of dollars on equipment and supplies. Larger commercial cleaning companies also may need to spend more on maintenance of commercial cleaning equipment.

Floor polishers, for example, will need to be maintained. For a small residential cleaner, this is not a concern because it’s not typically a piece of equipment used in a home. However, in a large commercial office building, it’s a practical necessity.

Insurance is another major cost, especially for large commercial cleaning operations.

Who is the target market?

Ideal customers are long-term corporate or multi-year clients willing to sign service contracts.

How does a cleaning business make money?

Cleaning businesses make money by charging clients for various cleaning services. These charges can be on a per hour, per square foot, or per contract basis.

How much can you charge customers?

There are several ways to charge for services. Some companies charge between $25 and $35 per hour for cleaning. Others charge per square foot. Typical rates for square foot are between $100 and $120 per 1,000 square feet. Some companies, however, charge more, up to $150 per 1,000 square feet. A per contract flat fee can also be negotiated if the client has an unusual building or home or needs custom pricing for volume business.

For deep cleaning, businesses typically charge more.

For example, a company could charge $75 to deep clean a kitchen, but only $30 for a bedroom, since a kitchen tends to be dirtier than a bedroom. Windows tend to be expensive, at $5 per window and $3 per screen. Polishing and carpet cleaning ranges from an average of $0.25 to $0.50 per square foot.

How much profit can a cleaning business make?

Profit margins vary based on the scale of the operation and the contract. They can be as little as 4% or as much as 48%. Larger businesses tend to have smaller margins, but higher revenue and total profits (by dollars). Smaller cleaning companies may have a higher margin, but lower total revenue.

A small cleaning operation can make between $50,000 and $100,000 per year. A large commercial cleaning company can make between $1 million and $10 million per year or more.

How can you make your business more profitable?

Making your company more profitable is difficult. This is because cleaning services are all relatively the same. However, you can try differentiating yourself by offering services your competitors aren’t. For example, if your local market doesn’t offer pet waste removal, you might add that as a complimentary service.

Another way to stand out in your marketplace is by developing a company culture that differs from other cleaning companies. Most cleaning businesses operate what could arguably be called a “boring” business. The culture is fairly “quiet.” You could offer a sharp contrast to the industry norm by using more audacious advertising.

You could also offer educational material. For example, offer potential clients booklets and brochures about what really lurks deep inside the fibers of their carpets or in the corners along the baseboards. Highlight statistics and research on indoor air pollution and how it makes people sick. Position yourself as a leader in your industry instead of “just another cleaning company.”

Day-to-Day and Growth

What happens during a typical day at a cleaning business?

Day-to-day activities of a cleaning business include vacuuming, mopping, dusting and sweeping, window cleaning, and general cleaning of rooms and possibly exterior surfaces of some buildings. Business owners also have to maintain customer accounts and invoices.

Larger companies spend a significant amount of time maintaining and signing customer accounts. Smaller cleaning companies typically maintain a small client load due to the nature of running a small business. On average, a small cleaning business can maintain between 20 and 70 clients.

A large company can maintain over 100 clients.

What are some skills and experiences that will help you build a successful cleaning business?

No special skills are required, but experience in cleaning helps. Most entrepreneurs to start this type of business have a passion for cleanliness and doing manual labor. Some businesses may benefit from special commercial cleaning certifications, which allow them to prove their efficacy to larger corporate clients.

What is the growth potential for a cleaning business?

The smallest cleaning businesses are run as one-person shops. Larger operations employ staff or hire subcontractors. Some businesses franchise their model and collect franchise fees. Larger operations also tend to put more money into vehicles (fleet) and advertising, focusing on strong branding and name recognition.

What are some insider tips for jump starting a cleaning business?

The easiest way to get started in this business is to ask friends and family if you can clean their homes. Simple cleaning contracts will solidify your reputation in this industry and help you get referral business, which will help fuel your first year of growth.

How and when to build a team

Building a team is never necessary for this business. However, if you want to expand, start hiring independent contractors or employees to help you clean as soon as your service contracts are too much for you to handle on your own.

Read our cleaning business hiring guide to learn about the different roles a cleaning business typically fills, how much to budget for employee salaries, and how to build your team exactly how you want it.

Part 2 - Is a Cleaning business the right fit for you?

Part 3 - Action plan to launch your Cleaning business in 90 days