Starting a cleaning service business can be a huge opportunity for entrepreneurs who want to get their hands dirty. Some advantages of owning a cleaning service business are minimal startup costs, low overhead and a flexible schedule.
With a high demand for cleaning services, starting a cleaning service business can be a huge opportunity for entrepreneurs who want to get their hands dirty. Some advantages of owning a cleaning service business are minimal startup costs, low overhead and a flexible schedule.
However, it also comes with a laundry list of new items to do, skills to add, and information to learn to get up and running. If you’re willing to get your hands dirty and maybe lose a little sleep, then it might be worth your investment to take the first step.
1. Choose A Cleaning Industry:
The first step is to determine what type of cleaning industry you want to start. There are three types of cleaning service industries: residential, commercial and special.
Residential cleaning: focuses primarily on homes, apartments and condos.
Commercial cleaning: specializes in bigger spaces like offices, hotels and stores.
Special cleaning: is more complex and requires special services like dry cleaning.
One thing to be aware of is cleaning for Airbnb’s. They can fall into any industry, but typically fall into commercial cleaning or special cleaning, depending on the requirements of the host.
The residential cleaning industry has a low barrier to entry, lower costs and requires less specialized skills and equipment. The commercial cleaning industry typically requires specialized skills, more expensive and specific equipment, more employees, and oftentimes more marketing efforts.
Scheduling for these industries vary from day time to evening/night shifts as well, which could make finding employees more difficult. Special cleaning typically requires more hours, more specific tasks, special skills and equipment.
When determining what type of industry you will serve, it’s important to be realistic in what you can afford when starting your business. Keep in mind, you can always scale your business later on.
2. Build A Budget:
There are several ways to help cover the cost of starting up a business: borrowing money from family or friends, taking out a business loan, using a credit card or using your savings, if you have that.
A big part of determining your budget is understanding the market. The market for global cleaning services is expected to reach about USD $1.15 trillion by 2028. The market is large and projected to continually grow.
Depending on the industry you chose, your startup costs could be low. If you’re looking to avoid debt and only spend as your business grows, the residential industry is a great place to start.
A few items that will eat your budget in the beginning are: registering your business, cleaning supplies, and equipment. Additional expenses can be: employees, vehicles, gas/mileage reimbursement, and insurance. Keep in mind, some of the purchases you make might be able to be written off depending on the structure of the business.
3. Choose A Business Name & Logo:
Deciding on a name for your business can take some time and consideration. Choose a business name that reflects the service and value you provide and is creative. You can also use an online name generator.
Before you hire a graphic designer check to see if the business name you came up with is already registered. If it is, then you’ll have to come up with a different name or add to it.
Once you’ve thought of a name, think how you can represent your business and encompass the name with a logo. Hiring a graphic designer to create a professional logo can help establish value and credibility for your business.
4. Choose A Business Structure:
Before registering your cleaning business you need to decide what form of business entity to establish. The form of business you choose will determine what type of form you need to file for tax returns. The two common business structures are: sole proprietorship or limited liability company.
From here you can register your business with the IRS, state and local agencies. To determine what business entity to establish or what structure is best for your business consider consulting with an attorney.
5. Register Your Cleaning Business:
Registering your cleaning business allows you to open a business bank account, hire employees and apply for loans. It’s important to register your business from the very beginning to separate your personal finances with your business. This will help you avoid any issues down the road with tax documentation.
Register Your Business Name:
Once you sort out all your business structure and license, you can officially register your cleaning business. One of the most common questions is, “Do I need to register my cleaning business?” The answer is it depends. If you are cleaning for your family and are not bringing in a lot of revenue then no, you do not need to register. If you plan on cleaning for people other than family and are going to generate revenue, then yes, register your cleaning business.
Register with the IRS: To operate a business you'll need an Employer Identification Number (EIN) from the IRS. An EIN is necessary for taxes, hiring employees, obtaining a business license and opening a bank account.
Register with State & Local Agencies:
There are three main licensing jurisdictions: State, local and federal. Depending on where you are doing business will determine what license(s) you will need. You will need to do some research on what is required where you live.
6. Open A Business Bank Account:
After you receive your EIN, open a business bank account. Once your cleaning business is registered, you can focus on the operations side of it. This means creating a business plan. It also is great to keep payments, records and tax information organized.
7. Create A Business Plan:
Once your cleaning business is registered, you can focus on the operations side of it. This means creating a business plan.
Think of your business plan as your road map. Where you are in the beginning stage of starting a cleaning business and where you see your business down the road anywhere from 3-5 years. A basic business plan includes a mission statement, the reason for your business, products and services you offer, a structure of ownership, marketing plan, insurance coverage and financial analysis. Creating a clear and detailed business plan will involve a lot of research, but will provide ways to execute on your vision, anticipate inflection points and ways to navigate problems before they happen.