How to Start a Cleaning Business

Starting a cleaning business can be an ideal way to begin your journey as an entrepreneur. Although they may seem simple, cleaning businesses have a lot going for them.

Starting a Cleaning Business

Cleaning is a service that will always be in demand, and you don't need an enormous amount of capital or any special training to get started. As a business model, cleaning will never be challenged by ecommerce, and the industry is not dominated by any major players.

Cleaning business formation guide

Though cleaning may not be the most glamorous type of business in the world, a well-managed and marketed cleaning business can generate good profits and become a trusted part of your client’s lives. Starting up a cleaning business doesn’t have to be complicated, and in this guide we’ll cover what you need to know.

Understanding the world of cleaning

Hiring employees

Deciding if you’re ready to start a cleaning business

Setting your business up with efficient marketing and administration practices

Choosing the best legal structure for your new organization

Gathering resources for your cleaning business

Following various rules and regulations

Finding information on taxes and finances for your cleaning business

... and much more

By the time you’ve read through our complete cleaning business guide, you will have all the information you need to set up and manage a thriving cleaning business. Let’s get into it.

Understanding the World of a Cleaning Business

Key Cleaning Business and Background Data and Statistics

Cleaning companies provide substantial benefits to the U.S. economy.

875K

In the U.S. in 2015, there were 875,000 cleaning businesses employing nearly about 3.5 million people.

$175B

People employed in the industry across the U.S.

4 - 6%

The industry is growing at a rate of between 4-6 percent a year.

The industry breaks down...
77%Commercial
10%Other
7%Damage Restoration
5%Residential

The commercial office and retail sectors generate the majority of revenue, followed by education and healthcare.

The number of cleaning companies is growing by around 1.7 percent each year

Around 10 percent of cleaning industry revenues come from franchises.

Commercial cleaning contracts are the most reliable type of income for cleaning businesses, with office buildings accounting for nearly a third of such contracts.

This all points to the cleaning industry being ripe with new opportunities for focused entrepreneurs, so now might be the perfect time to dive into starting your cleaning business. Incfile is here to help you form your cleaning business and understand the ins and outs of owning a cleaning company.

Questions to Ask Before You Start a Cleaning Business

Is Cleaning Entrepreneurship for You?

Running a cleaning business could be a good option if you:

Have a strong focus on customer service

You'll need to make sure all your employees are great at dealing with demanding clients.

Don’t mind staff turnover

Cleaning isn’t an extremely well-paid job, so there can be fairly rapid employee turnover.

Marketing

You will probably need to build a website and have a brand and logo professionally designed. You should also look into local search advertising.

Are great at training

Your cleaners will need to clean to the very highest quality, so they will need excellent training and materials.

Don’t mind competition

The barrier to entry for cleaning businesses is very low, and there are always new entrants into the marketplace.

Operational management

Ensuring customers are served well and beauty treatments are provided to the standards you expect

Enjoy dealing with people

Cleaning is a very people-focused business, so you will constantly be interacting with customers and employees.

What Are the Main Challenges for a Cleaning Entrepreneur?

Aside from intense competition and employee turnover, the main challenge for a cleaning entrepreneur will be finding new customers and keeping existing ones happy. You’ll also need a rock-solid understanding of pricing and business finances — if you’re paying other people, your margins will likely be very thin.

What Does a Day in the Life of a Cleaning Entrepreneur Look Like?

On any given day you will be:

1

Scheduling appointments for cleaning

2

Negotiating contracts and setting rates

3

Dealing with employees

4

Ordering cleaning supplies

5

Planning out optimal routes

6

Developing training on cleaning and customer service

7

Collecting payments and managing finances

8

...and much more

What Type of Cleaning Business Do You Want to Run?

One of the first things you’ll need to decide on is the type of cleaning business you want to run. You have a few different options:

1

Residential

Cleaning people’s homes and private residences

2

Commercial Office

Cleaning offices and similar work spaces

3

Commercial Retail

Cleaning shops and other retail spaces

4

Commercial Other

Other commercial areas and businesses

5

Industrial

Cleaning factories, warehouses and other industrial areas

6

Municipal

Government, education and other publicly-funded facilities

7

Specialist

Cleaning that requires slightly more special attention, including medical and healthcare facilities

You can go even more detailed than this and focus on narrower areas of cleaning. This might include:

1

Real estate

Cleaning premises that are being put up for sale or rent, or cleaning homes or apartments in preparation for move in/out.

2

Upholstery and Carpets

Removing stains and dirt from soft furnishings

3

Outdoor

Cleaning home exteriors, driveways, and other surfaces using pressure washing and similar techniques

4

Blinds and Curtains

Cleaning all types of window treatments and finishes

Explore the market opportunities in your area to see where you can make the most impact.

Plan Your Cleaning Business

Before you start your business, there are a few key areas you need to focus on. You will need to figure out whether there’s a demand for your cleaning business services, consider potential benefits and pitfalls, understand how your business finances might look and ensure everything is in order.

Do Market Research and Validate Your Cleaning Products and Services

Before you launch your cleaning business, you need to understand if there’s a demand for what you’re selling. That means carrying out market research and “validating” your services. Here’s how to go about it:

Identify your business’s unique selling points (USPs)

These are the areas that will set you apart from competitors and encourage customers to come to you. You might have better pricing, a higher-quality service, faster delivery or some other special feature. Green and eco-based cleaning are becoming increasingly popular, for example.

Consider who your competitors are

Having competitors is a good thing as it shows there’s a market for your cleaning services. Low barriers to entry mean there is typically lots of competition for cleaners.

Get involved with business communities and discussion groups

Ask questions about cleaning businesses. You may even be able to find some clients there!

Look for market research reports for cleaning businesses

Because cleaning businesses operate in a very localized market, you might want to look at your specific area. These reports don't have to just be about cleaning businesses; if you’re after commercial cleaning clients, check commercial activity in your region, for example.

Talk to clients

Speak with potential customers to understand what they want from your cleaning services. This is especially important if you’re going into a specialized area.

Understand Your Cleaning Business Model and Financial Projections

All businesses need a business model, which will lay out the way you will generate sales, provide services and make money. Think about your business model now, because it’s better to have that in place so you can start acquiring customers and generating revenue from day one.

You will also need to look at financial projections for your cleaning business. What are your expected sales and revenues? What is your profitability? How much money will you keep in the business to grow it? How much will you pay yourself and others? If you can, try to plan your revenue out for the next month, three months, year and two years. Margins in the cleaning business are slim, so plan with that in mind.

Write a Business Plan for Your Cleaning Business

Finally, you should put your business plan together. Business plans do vary slightly, but they should cover the following areas:

1

An executive summary with the most important points from your business plan

2

Your goals and what you hope to achieve with your cleaning business

3

A description of your business, background information and context

4

A market analysis and likely demand

5

An overview of how your business is structured

6

Your business model

7

How you will market and sell your offerings

8

Financial projections, revenue and profitability

9

Appendices

We’ve got the perfect guide to writing your business plan.

Choose the Right Business Structure and Register Your Cleaning Business

Now that you have all the background information for your cleaning business, it’s time to make it into a reality. That starts by choosing the right structure or “legal entity” for your business. In the U.S., there are four main business structures. They are:

Sole Proprietorship

This is the "default" business structure and is what your business will be if you decide not to create a more formal structure. We don't recommend this type of business as it doesn't give you the legal protections you need.

Limited Liability Company or LLC

The most common type of business entity. An LLC is fast, simple and inexpensive to setup and maintain. It protects your personal finances and assets and is a great way to start your cleaning business.

Series LLC

This is a special type of LLC entity that's only available in certain states. It allows you to create "mini" LLCs, each with their own limited liability and separate assets, under the umbrella of a master LLC.

S Corporation

This is a more complex type of business and isn't generally recommended for smaller organization.

C Corporation

These are the largest and most complex types of businesses and are far more than the average entrepreneur or business owner will need.

For more information on the advantages and disadvantages of different types of businesses, please see our in-depth guide. If you’ve still got questions, we’ve answered them to help you choose the right business structure for your cleaning business.

In most cases our recommendation would be to create an LLC. We have a complete guide to everything you need to do, and we can set one up for your cleaning business. LLC formation does vary from state to state, but we’ve got you covered, wherever you are.

Special Considerations for Setting up a Cleaning Business Entity

Liability protection and insurance will both be very important for a cleaning business. Although people are careful, accidents can happen, so limiting liability and having good protections in place will be essential.

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Setting up Your Cleaning Business

Once you've legally created your cleaning business, you’ll need to get some other things in place.

Location of your workshop

Where are you going to run your business from? Will you work from home, get an office, use a shared working space or something else? You will likely run your cleaning business from home, but spend most of your working time in other locations. Alternatively, you may have a small office or commercial space where you can keep materials, provide training and work with employees.

Equipment

What equipment do you need to manage your cleaning business? You will need a laptop, computer or smartphone to communicate with clients. You will also need transportation and cleaning supplies. Don’t forget equipment like vacuum cleaners, extendable dusters, steam cleaners and the like. Make sure you understand exactly what you need to spend so you can write it off against business expenses.

Marketing

You will probably need to build a website and have a brand and logo professionally designed. You should also look into local search advertising.

Process

Think about the business processes and software that you’re going to use to run your business efficiently and effectively.

Employees

If you’re not doing all the cleaning yourself, you will need to hire employees to help you out. More on that below.

The Complete "Start Your Business" Checklist

A Clear and Comprehensive Guide to Starting Your Business the Right Way

Hire Employees

If you’re just running your cleaning business solo, you don’t need to worry about employees. If you are hiring people to work for you, you will need to know what to do. See 10 tips on hiring employees.

Contact the IRS and let them know you will need an EIN for your cleaning business. This is a number you will use to file and pay your taxes. We put together this guide to getting your EIN.

Your employees must be legally able to work here. Carry out background checks and ensure they have all necessary legal documentation.

In most cases you will need to report the hiring of employees to your state.

You will need to calculate and keep back income tax so you can pay the appropriate bodies. You will also need to pay the employer portion of the payroll tax.

As listed above, you will need to make sure you have proper workers’ compensation insurance to cover injuries, illness, medical costs and the like.

You will need to run payroll and compensate your employees on a regular frequency. Your state may mandate how often employees need to be paid.

You do have certain responsibilities and requirements for hiring employees. In addition to getting a proper employment contract in place with them, you have a duty to provide them with a safe working environment, proper training, regular pay and certain other criteria. OSHA covers your health and safety requirements, while the U.S. Department of Labor provides information on other responsibilities.

Useful Online Tools for Your Cleaning Business

Here are some really great online tools for managing your cleaning business. They will reduce the time you spend on administration, help you to collaborate with others and free up your time to grow and manage your new venture.

Conclusion

A cleaning business can be a very solid choice for a first-time entrepreneur. The combination of a low barrier to entry, focus on strong customer service and the need for excellent interpersonal skills makes it an ideal choice.

Although there’s lot of competition and plenty of demanding clients, a cleaning business that's run well can generate excellent revenue. When you’re ready to start up your cleaning business.

Start your Cleaning Business with us, today