The Basics of Opening a Cleaning Business: A 5-Step Guide

If you’re looking to start a business with relatively low overhead and operating costs and a reliable demand, a cleaning service may be the ideal venture for you.

A cleaning business tends to have lower overhead expenses. Your staff will mostly be servicing other houses, so you won’t need to rent an office space. This means you won’t have to pay for utilities and maintenance.

And because of the pandemic, cleaning services have grown more popular. People are looking for disinfecting services that follow the CDC’s recommended procedures to help them ward off the coronavirus.

There are plenty of janitorial service franchise opportunities that allow you to enter the cleaning industry easily. But if you want to own an independent business, read this guide to find out how you can start a cleaning services venture from scratch.

1. Choose your type of cleaning business

Cleaning businesses usually fall into two categories: residential or commercial services. Before anything else, you have to choose between the two. This will affect your succeeding decisions, from equipment acquisition to marketing strategies.

You want to look at the location you’re targeting when choosing between residential or commercial cleaning services. If you’re located in the suburbs, offering residential services may be better since there are more customers available.

On the other hand, a commercial cleaning service may give you higher profits, especially if you’re using specialized cleaning chemicals and equipment.

2. Estimate your expenses and set your cleaning rates

After choosing your niche, it’s time to plan your business finances. The first step is to specify the services you’re offering. Will you be offering house cleaning and maid services or full office sanitation and deep cleaning? Are you adding separate specialty services like post-construction cleanup, pressure washing, or industrial carpet cleaning?

The services you’ll be offering will determine your rates and your operating costs. You’ll need to estimate your startup costs, monthly expenses, and monthly income.

Consider your cleaning products and equipment, employee wages, advertising costs, insurance premiums, and fees for licenses and permits. Then, determine your rates and how much income you’ll earn per month. Most cleaning services charge by the hour, per square foot, or with a flat rate.

3. Secure funding

After crunching the numbers, it’s time to secure funding. Putting personal money into the business is one of the easiest ways to overcome your startup funding needs. However, this creates unnecessary risk if done incorrectly.

If using your personal funds isn’t possible, your next option is to take out a loan. You can apply for any of the following:

  • Traditional bank loan
  • Business line of credit
  • Small Business Association (SBA) loan
  • Equipment financing

These loan programs have their own pros and cons, so be sure to research each before applying for anything.

4. File legal paperwork

person handing a pen to another person

File your legal paperwork to register your business. First, you’ll need to register the business as a legal entity. You can do this on your own or have an online legal document service to do it for you.

You also need to get an employer identification number and open a business bank account. Next, check with your county or town to see if there are licenses or zoning permit requirements for your business. Check SBA’s list of state business license offices to find out which issuing agency you’ll have to talk to.

5. Get proper insurance

Finally, make sure the business is appropriately insured before you start operating. At the very least, purchase general liability insurance. This financially protects you in case someone is injured or the client’s property is accidentally damaged as a result of your service.

Other insurance policies to consider are workers’ compensation insurance and janitorial bond.

Once you’ve established the foundation of your cleaning business, it’s time to plan your marketing strategy and get customers. You’ll also need to purchase your equipment and cleaning supplies.

Remember to start small and slow. Take on just a few clients to acclimatize yourself with the internal and external aspects of the business. As you spend more time with the business, you’ll learn how to optimize your resources, manpower, time, and spending, increasing the quality of the services you deliver.

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