Starting a cleaning service is one of the most straightforward business possibilities available. You may potentially be up and running in a week or less with minimum equipment and experience!
This explains why the cleaning sector in the United States has grown steadily in recent years, reaching billions of dollars in value. Nonetheless, if you want to take advantage of this chance, you’ll need the correct knowledge.
Fortunately, you’ve arrived at the right spot, as this step-by-step guide will give you with all the information you’ll need to establish and start a profitable cleaning service.
Let us start with the most important step.
Step 1: Find Out if this is the Right Business for You?
Positives Vs Negatives
| Give a useful service Aid in the education of children Choose your own working hours. Profit margins that are high Possibility of expanding into additional areas Startup expenses are modest. | A lot of competition Profit margins are shrinking as clients focus on pricing. Work that is difficult, physical, and even nasty |
Industry Trends
- Market analyst IBISWorld estimates the US janitorial sector will be worth more than $81 billion in 2022, after rising at a rate of 4% each year since 2017.
- Growth estimate – IBISWorld anticipates the janitorial services sector to expand at 4% per year through 2026, while Research and Markets expects the professional cleaning services market to grow at 6% per year through 2026.
- Number of enterprises – In the United States, there are over one million janitorial services firms.
- Employees – There are about 2 million janitorial workers in the United States.
Cost of Starting a Cleaning Business
Although starting a cleaning services business is reasonably inexpensive, it is still prudent to understand what you are paying for.
If you already have a truck or don’t need one and utilize simple cleaning materials, starting a house cleaning service might cost as little as $1,000. However, if you want to start a large cleaning business or work on many jobs at the same time, you may need up to $20,000 to cover more specialist equipment and supplies. However, on average, you’ll require roughly $10,000 to launch your cleaning company.
Investment Items:
- Cleaning and disinfecting agents
- Gloves, sponges, and scrubbers
- Towels, both disposable and reusable
- Brooms and mop
Is Cleaning Business Profitable?
Profit and revenue will vary greatly based on skills. Even with a small number of appointments, solopreneurs might expect to earn $50,000 in their first year or two. Assuming an 80% profit margin, this equates to a $40,000 pre-tax profit.
With increased reservations, you may hire more cleaners and rent an office space. You should produce an additional $50,000 in yearly income for each full-time cleaner you hire at a $35 hourly cost. You could make $300,000 each year with yourself and 5 full-time cleaners. However, due of the increased operational expenditures, your profit margin might drop to 30%. You’d still make $90,000 profit.
Entry Barriers
- High levels of rivalry and market saturation
- Because of competitive marketplaces, profit margins are low.
- Industrial/commercial service health and safety compliance
Step 2: Create a Strategy
Identify a Gap
It’s OK to decide you want to start a cleaning business, but if you don’t have a motive to provide your services, your success will be determined by chance.
First, think about your ideal client. Cleaning services for the elderly, for example, might be viable because they may struggle to conduct such tasks themselves. Targeting consumers with high wealth, on the other hand, may be a better alternative because they are more likely to be willing to spend a premium price for cleaning services.
As previously said, it may be a good idea to target clinics, hospitals, medical centers, and testing laboratories, which are becoming increasingly worried about sterilization.
Solutions
The cleaning services you provide will be heavily influenced by the opportunity you choose in the previous section. If you opt to serve older consumers, your main offering might be routine cleaning such as wiping, dusting, sweeping, and mopping, with the occasional thorough clean. However, if you decide to target business clients, floor cleaning will be a popular service.
In the end, as long as your selected services are relevant to your target market, you’ll be OK.
Here are a few examples of common cleaning services and products:
- Cleaning that is good for the environment
- Cleaning of the home
- Cleaning for businesses
Pricing
You may price your cleaning services in three ways: hourly, fixed-rate, or long-term contract.
Hourly is the most basic and best approach to begin started, particularly if you have little experience.
The next step up is to use a set fee, which necessitates an exact assessment. One advantage of adopting a set rate is that if you complete sooner than intended, you might wind up with a high hourly rate.
Finally, if the workload rises throughout the period of the contract, you may wind up with a lower total hourly pay. Clients may also request a discount because of the length of the contract. On the bright side, this approach assures consistent cash flow over a long period of time and aids in the development of client loyalty.
Before you determine your service pricing, consider the following:
- Investigate the rates of local competitors: The typical national hourly charge for house cleaning services is $25 to $50 per cleaner, according to Home Guide. Obviously, this pricing varies greatly, so set a rate which is competitive with cleaners in your region.
- Estimate your labor costs: According to the United States Bureau of Labor Statistics, the average hourly salary for cleaners is around $13.50. Make sure the amount you offer includes the time spent cleaning as well as any other chores, such as travel.
- Estimate the cost of supplies: 6% of labor, or $0.81 per labor hour on average.
- Consider overheads and taxes: In addition to rent, wages, utilities, taxes, and marketing, your rates must include any overhead expenditures such as rent, wages, utilities, taxes, and marketing. As a solopreneur, you may increase the price by 50% to compensate these expenses. However, if you want to manage a larger firm with staff, adding anything from 60% to 90% more would be prudent.
- Add a suitable mark-up: The final piece of the jigsaw is a profit-generating mark-up. While a 100% mark-up would be ideal, you must remain competitive in your local market, so a 30% to 50% mark-up is a decent starting point. Cleaning firms often add a 40% markup, or $10 per work hour.
According to the data above, the average hourly rate for cleaning services is $34.98, however this will obviously vary depending on your region and expenditures.
Once you’ve determined your expenses, you can use this profit margin calculator to figure out your mark-up and final pricing points. Keep in mind that the pricing you use at launch should be subject to modify if the market warrants it.
Target Market
You should have a decent concept of the clientele you intend to target based on the services you intend to give at this point. Depending on whether you pick residential or commercial cleaning, the following clients are available to you.
In the case of a residence:
- Would you like to assist busy working parents in cleaning up after their children? What about elderly consumers who are unable to clean as well as they once could?
- Landlords: You might offer your services to landlords as a value-added service for their rental properties, or you could offer to clean flats between renters.
- Property managers are similar to landlords, but you may be assigned additional tasks such as cleaning between open houses or inspections.
For advertising:
- Property management companies: You might clean their offices in addition to the properties they manage.
- Schools, universities, and other educational institutions have a lot of foot traffic, therefore frequent floor cleaning may be necessary.
- Businesses and government: Offices must be cleaned on a regular basis to keep things orderly and attractive.
- Hospitals: Because of heavy foot traffic and the pandemic, floors and rooms must be cleaned on a regular basis and sanitized.
- Builders and building contractors: building sites are often dirty, and workers are needed to remove debris and unused materials.
Location
To cut costs in the early stages, you may choose to manage your business from home. However, if your company expands, you will most likely need to hire employees for various tasks and may need to rent office space. Commercial space for rent in your region may be found on sites like Craigslist, Crexi, and Instant Offices.
When selecting a business facility, you should consider the following guidelines:
- A central position that is easily accessible by public transportation
- Natural light and ventilation
- Lease that is flexible and may be extended as your business grows
- Ready-to-use area that requires no substantial upgrades or repairs.
Step 3: Write a Business Plan
Every company need a strategy. This will serve as a manual to help your business through the launch process while keeping you focused on your primary objectives. A business plan also helps potential partners and investors understand your company’s mission and vision:
- Executive Summary: A brief summary of the full business plan that should be produced when the plan is completed.
- Business Overview: A description of the organization, including its vision, mission, ownership, and corporate goals.
- Product and Services: Provide detailed descriptions of your offers.
- Market Analysis: Conduct a SWOT analysis to evaluate market trends such as variances in demand and development potential.
- Analyze your top rivals’ strengths and shortcomings, then produce a list of the benefits of your services.
- Sales and marketing: Investigate your company’s unique selling propositions (USPs) and create sales, marketing, and promotional plans.
- Management Team: A summary of the management team’s functions and professional backgrounds, as well as a corporate hierarchy.
- Procurement, office location, critical assets and equipment, and other logistical aspects are all part of your company’s operating strategy.
- Financial Plan: A three-year financial plan that includes initial expenses, a break-even analysis, profit and loss predictions, cash flow, and a balance sheet.
- Include any extra financial or business-related papers as an appendix.
Step 3: Create a Marketing Plan
Although word-of-mouth and internet visits can contribute to some of your revenue, you should still engage in digital marketing! It is extremely vital for new businesses to spread the word since it increases consumer and brand recognition.
After you’ve launched your website, connect it to your social media profiles and vice versa. Because you can generate compelling posts that sell your items on social media, it is an excellent tool for promoting your business:
- Facebook: A fantastic paid advertising network that allows you to target certain demographics, such as males under the age of 50 in the Cleveland region.
- Instagram has the same advantages as Facebook, but with a different target demographic.
- Website: SEO will help your website rank higher in relevant search results, which is critical for driving sales. Make certain that your website’s calls to action are optimized. Experiment with the wording, color, size, and location of calls to action like “Book Now.” This has the potential to dramatically expand the number of clients.
- Google and Yelp: Getting listed on Yelp and Google My Business can be critical to creating awareness and consumers for businesses that rely on local clients.
Kickstart Marketing
Increase awareness of your services and promote your brand by utilizing your website, social media presence, and in-person events. Here are some ideas:
- Competitions and giveaways – Raise interest by giving rewards to consumers who do a certain activity, such as signing a long-term contract and receiving 30% off.
- Install eye-catching signage at your store and on your website.
- Distribute fliers in your area and at industry gatherings.
- In-person sales entail promoting your goods or services at local marketplaces or trade exhibitions.
- Create a video – Create a video about your cleaning company. Use humour, and it may go viral!
- Seek recommendations – Provide incentives for customers to refer new clients.
- Paid social media advertisements – Select sites that will reach your target audience and run targeted ads.
- Share client testimonies regarding how your service aided them.
- Make infographics and integrate them in your content.