Starting a house cleaning business from scratch is a well-worth-it investment in time, energy, and resources. A cleaning business startup is one of the most lucrative and rewarding businesses to launch.
Low overhead, low barrier to entry, and relatively low startup costs make learning how to start a professional cleaning company an attractive proposition for entrepreneurs.
Whether you plan to start your own cleaning services business as a second income source or side hustle, or you’re planning a career change, this guide will give you everything you need to hit the ground running.
Starting a Cleaning Business Checklist
1. Perform Market Research
The old adage, ‘Do your homework’ doesn’t just apply to the classroom. When starting your company, one of the most important steps is doing your research.
It sounds rudimentary, but this mission-critical step can mean the difference between glaring success and total failure. At the very least, it can save you from most headaches and expenses as you progress.
Areas to Research:
- Various Business Models (franchise, sole proprietor, acquiring an existing company, etc.)
- Competitive intelligence (other successful cleaning companies)
- Market trends
- Gap analysis (is there a lack of service providers for a specific niche or use case)
- Market demand (locally)
Remember, you can never have too much real-world data and information. The specifics of this research and data will be tailored to the individual and their aspirations, but broadly speaking, competitive and market research will go a long way for any cleaning startup.
2. Write a Business Plan
Failure to plan is akin to planning to fail. The overreaching goal of a cleaning business plan is to help you articulate the strategy surrounding the conceptualization, design, structure, and implementation of your cleaning startup.
Within this plan is a detailed breakdown and insight into the steps and resources necessary to bring your vision from idea to reality.
Benefits of a Business Plan
- Gain insight and clarity into what is necessary to achieve the desired outcome
- Establish a realistic timeframe for each milestone
- Discover internal and external strengths, weaknesses, opportunities, and threats
- Offers a tool to conduct periodic evaluations on progress
- Provides lenders or financiers with an idea of how well they might expect your company to perform
The Ten Most Important Components of a Business Plan Include:
- Executive summary: Your cleaning company’s mission statement, as well as a summary of its objectives, services offered, the market it operates in, and the target audience it serves.
- Business Description: A more comprehensive overview of the business and its goals, including everything from the proposed corporate structure, to details regarding the problem it seeks to solve, the market it operates in, the competition, and more.
- Market Analysis and Strategy: Defines the target audience, demographics, industry, and niche. Seeks to understand customer pain points, needs, desires, and budgets.
- Competitive Analysis: This section details the competitors your new cleaning business will be up against. A good competitive analysis will discover areas of opportunity and costly pitfalls you’ll want to avoid.
- Management and Organizational Hierarchy: An outline of your organization’s hierarchy, including roles, qualifications, direct reports, and more.
- Services: A detailed description of the services offered, how they are fulfilled, and the necessary processes, equipment, and materials used for each.
- Operating Plan: A strategy that covers the overall day-to-day operations of the company.
- Financial Projections: Part of budgeting, financial analysis, and projections forecast future revenue and costs to help you optimize cash flow and plan for growth and expansion as well as costs.
- Exhibits and Appendices: A catchall section often used to include extraneous or supplemental information such as marketing research, permits, licenses, graphs, legal documentation, pictures of the product or services, financial documents, and more.
3. Get funding
You’ve heard it before: it takes money to make money. Luckily, a cleaning startup generally requires less startup capital than other ventures.
Even so, you will want to put together a detailed breakdown of startup costs, with enough of a financial runway to give you time for revenue to catch up with expenses.
Options for funding your cleaning business:
- Borrow from Friends and Family: This is often the best and least stressful option. Getting friends and family to help isn’t just an easier proposition (they generally want to see you be successful); it also nearly always comes with better terms (i.e., low or interest-free).
- Small Business Loans: The Small Business Administration (SBA) and other organizations and banks often have special programs for helping small businesses get financed. This route can be a bit frustrating as far as red tape and paperwork go, but if you qualify, you may be able to acquire funding with more favorable terms than a standard bank loan.
- Short-Term Loans and Credit Cards: Arguably the riskiest of financing options, both short-term loans and credit cards carry high-interest rates. Although the scope of this guide can’t offer personalized investment or financing advice (every entrepreneur’s situation is unique), we can confidently say that these options should be carefully weighed against the risks involved and typically used as a last resort.
- Bootstrapping: One of the best ways to finance and fund a new cleaning startup business is by ‘bootstrapping’ it yourself. Bootstrapping is a phrase that describes utilizing existing resources and ‘making do’ with what you have to get your cleaning venture off the ground. This can include using old or donated equipment, hitting up garage sales for supplies on the cheap, converting your minivan into a work van, and more.
4. Select a Market
This is where some market research from Step 1 will come into play. Choose correctly, and you’ll make your life 100x easier. Choose wrong, and you’ll face stiff competition from existing cleaning businesses that have gained a strong foothold in the local market.
The right market for launching in should also be one in which you have identified a need. In other words, is there a gap between the availability of cleaners and the demand for cleaning services in that area?
Competitor research will be necessary when honing in on where to set up shop. This research may also reveal hidden opportunities to differentiate your cleaning startup from the competition or to ‘niche down’ (more on this below).
5. Select a Niche and Specialize
Especially when competing against established or large corporations, ‘niching down’ and specializing is one of the easiest ways to differentiate from the sea of competition right out of the gate.
Niching down refers to targeting a sub-section of the broader target demographic. For example, a cleaning startup may want to specialize in getting commercial contracts such as cleaning office spaces, warehouses, or food production facilities.
- Each industry or niche typically has unique needs, desires, budgets, and expectations.
- Some industries may require specialized equipment or approaches that differ widely from standard cleaning services.
This presents an opportunity for a startup to specialize in being the best for those businesses. Learning how to price commercial cleaning jobs is a valuable skill when you want to grow.
For many cleaning startups, bidding on cleaning jobs in the residential market is the path of least resistance. Commercial businesses are the harder niche, usually dominated by large franchise cleaning companies.
But even within the residential sector, there is an opportunity to ‘niche down’. Consider getting apartment complexes, single-family homes, rental units, and more.
Specializing refers to offering at least one specialized cleaning service. For example, outdoor cleaning, ‘green’ cleaning solutions, a unique approach to cleaning, UV disinfecting, and more.
Key-Takeaway: Rather than being a jack of all trades and ‘master of none’, a business can focus on outperforming the competition in one specific area, gaining a foothold and customer loyalty that can translate into cross-sales later on down the road as your service line expands.
6. Plan Your Budget
When starting a business, most entrepreneurs have visions of fat checks and living a lifestyle they have always dreamed about. But before attaining those goals, one must first be realistic about the costs involved with getting there.
The budget for a cleaning startup needs to be detailed and well-planned, accounting for both one-off and recurring costs, balanced against projected cash flow to ensure sustainability over the long run.
For a cleaning business, there are a few main expenses that most new companies expect: Supplies, Labor, and Equipment.
The type, amount, and cost of supplies will vary widely depending on the types of services you offer and the type and number of clients you expect to service.
- When starting out, Costco, Sam’s Club, and other bulk discount retailers can add up in savings.
- Consider looking into loyalty cards or rewards programs with various store credit cards to stack up even more savings.
- At some point, transitioning to purchasing wholesaling is an ideal next step. However, this avenue isn’t usually an option for startups due to required order minimums that are typically relatively high.
When starting out, you may need to complete much of the work yourself. This is a good idea regardless because it gives you a ground-up view of what is expected of each role in your company and what is required to achieve the results and quality you will expect of employees or contractors.
Speaking of employees, hiring 1099 contractors (when possible) is a great way to reduce operating expenses and the headache of paperwork, withholding taxes, health insurance, and unemployment insurance.
That said, always speak with an attorney or tax advisor to clarify what you are and are not allowed to do in your particular jurisdiction.
A cleaning company doesn’t have much in the way of heavy machinery, but it may still be necessary to budget for commercial-grade vacuums, wet/dry vacs, a service vehicle, and more.
7. Register Your Business
When starting a business, there are a few items on the legal side that need to be taken care of. First up, is choosing a legal business entity under which to operate.
This guide is not meant to offer any type of legal advice in this matter. However, we can briefly cover the potential avenues most applicable to a cleaning startup.
- Sole Proprietor: The most basic of business structures, this type of company is operated in the owner’s name and offers no liability protection. It is also the easiest to set up, with virtually no paperwork, business registration fees, or processes to contend with. The only caveat is that if you intend to market your business under a name other than your personal name, you’ll need to file a DBA (doing business as).
- LLC: Also known as a Limited Liability Company, this corporate structure will require paperwork to be filed with the state and a business registration fee. The LLC will have its own tax ID, but profits and losses are called ‘pass through’. This means that any net profit or loss from the company will ‘pass through’ to the owners’ personal tax returns.
- S-Corp: Not actually a legal structure; an ‘S-Corp’ is a tax designation that can be filed for and granted to an LLC or a C-corp. The primary benefit of an S-corp is that a certain percentage of the profit can be distributed to its owners as a ‘dividend’, thus bypassing the self-employment tax for that portion of the income received.
8. Start marketing
The days of ‘If you build it, they will come’ are long gone. Today’s markets are more competitive than ever before, with new businesses facing a sea of competitors, some of which are well-established and with bigger bankrolls.
Digital Marketing and SEO
Savvy new cleaning companies would be wise to lean into digital advertising, ideally partnering with an SEO or digital marketing agency specializing in SEO for cleaning services.
Despite the steep competition, the digital landscape still offers a means for even startups to gain traction and get cleaning clients.
User acquisition channels such as organic SEO, paid ads, and Facebook ads for cleaning companies offer small companies, and budding startups access to the same high-impact, low-cost channels used by major corporations.
With the right tactics, these digital advertising channels enable brands to get in front of the RIGHT customer, at the right time, with the right message, increasing conversion rates, and driving ROI.
For those still on the fence, consider that more than 80% of all in-person and online sales are influenced by a search engine query. And regarding search engines, Google is the biggest elephant in the room.
Networking is a powerful tool at any business’s disposal. Leveraging time and connections, networking is often the foundation of many new cleaning startups’ marketing plans.
Tap into social networks, friends, colleagues, family, and more to expand reach, gain visibility and earn new customers.
Other Opportunities for Networking Include:
- Trade shows
- Industry-specific communities
- Industry-specific forums or groups
- Social media groups and communities
- Local chamber of commerce
Referrals are a valued and cost-effective lead-generation tactic that also speaks to the value and quality of services offered by your company.
This method relies heavily on impressing your customers so much that they are willing to proactively (or when asked) send business or prospects your way.
Download the Free Cleaning Business Checklist PDF
Save a condensed version of the above checklist as a PDF file by clicking the download button below:
Common Questions About Starting a Cleaning Business
Starting a cleaning business is a good idea because of minimal overhead, residual income, and higher-than-average profit margins.
A cleaning business’s overhead costs include payroll, supplies, insurance, advertising, legal fees, and storage fees.
The Bottom Line On Starting a Cleaning Business
Anything worth doing is worth doing well, and when it comes to starting a cleaning business, those that do it right will reap incredible rewards both monetary and professional.
If you’ve been on the hunt for a new business opportunity with low overhead, high margins, minimal oversight, and manageable startup costs, launching a new cleaning business might be just what the doctor ordered.
This ‘evergreen’ service is always in high demand, with customers often sticking with the same company for years or even decades. By following the steps in this guide, you’ll be well on your way to starting a thriving cleaning business that’ll keep the competition on its toes.