Cleaning service industry is one of the most profitable and lucrative sectors, which is expected to grow to 46.3 billion dollars by 2020. Homes need regular cleaning, and it is a job that most homeowners are eager to shrug off. Therefore, starting a cleaning company is a great business idea if you are looking for ways to begin small, with practically nil investment. You can earn triple in no time, and the good news is you can start the business with a one-man army, that is you. What’s more? The barriers to entry in this business are relatively low. All you need is a passion for the business and common cleaning equipment.
So, a business that doesn’t require a huge start-up fund, staffing and has a significant market value is an ideal option for you. Today, we will help you with the process of starting a cleaning business all by yourself.
Step 1: Determine How You Want Your Business to Take Shape
Like we mentioned earlier, you can start the business with one person as well. However, you have to determine other stuff too, such as whether you are ready to go all in with your cleaning business or start with a few basic services. It is vital that you start small, instead of offering too many services. We also suggest that you gain first-hand experience about the work, its workings, and the industry by working part-time under someone already established. You are more likely to find some early work through referrals and word of mouth publicity if you live in a small town. However, the marketing gets tougher in bigger cities with the growing competition.
Step 2: Plan Your Finance and Raise Your Money
Before you venture into this business, it is important that you create a budget for your start-up. Most cleaning businesses can be started off with just $2000. This is a basic budget that includes licenses, permits, and registration, insurance policy, cleaning tools, and gears, basic advertising cost and single employee salary.
Your insurance cost and the equipment cost may vary depending upon the number of employees you hire.
Although you can start the business with even $1000, we suggest that you keep another $1000 aside for any sudden expenses. If you do not have the money saved up for your business, you can take up a bank loan.
For an easy bank loan approval, you will need to have a solid business plan and a good credit history. Your business plan should include your financial goals, mission statement, purpose, marketing tactics, client base (if you already have one) and at least a 5-year growth plan.
Step 3: Choose a Business Structure for Registering
You need to register your business as a legal entity. For that, you will have to determine a business structure. You can register your business as a sole proprietorship or as a limited liability company. Both have their respective pros and cons. For instance, as a sole proprietor, you will enjoy the entire profit and have absolute control over your business. Not much paperwork is needed to establish this kind of business structure. However, you will have to bear the losses as well.
On the other hand, an LLC gives owners protection from personal liability. Your personal assets will not be held in case your business runs a loss. However, you will have to make self-employment tax contributions. Other types of business structures include general partnership, LLC partnership, and corporation.
Know Your Tax Obligations
If you establish your business as a sole proprietorship, you are not required to submit a separate tax report for your business’ profit and losses. Your personal and business incomes will be considered as one, and hence, you will have to file an IRS for individual tax return.
In case you start your business as LLC, you can file tax as a sole proprietor, partnership, S or C Corp. Consult a tax professional or auditor who will walk you through with the pros and cons of each type.
Step 4: Name Your Business
Naming your business appropriately is extremely vital, as your business name should reflect your business concept, services, idea, mission, and value proposition that differentiates you from your competition. Make it short and easy to remember. You cannot have a name which is already taken by a similar company from the same state or which is trademarked. Look up Google to determine your best choices.
Step 5: Obtain Licenses, Work Permits and Insurance
Licenses requirement vary from business to business, state to state and country to country. You may have to obtain an occupational license as per some cities, or you can make do with just a DBA (Doing Business As) form. Cleaning business also requires certain work permits that you may need to abide to continue running your business ethically. Your best source of information for licenses queries should be your local corporation center.
The registration process will not take more than two days.
Insurance is Must
If you want to protect your business and yourself from unforeseen damages or breakages to client property, you will need to cover your business with liability insurance.
Accidents in business, especially in the one you are operating are quite common. You or your employee may unintentionally break a vase or knock off a bookshelf. Anything can happen; therefore, liability insurance is a must for companies catering service to commercial clients.
Step 6: Get Your Equipment
A significant part of your cleaning business investment will go in buying your equipment and cleaning tools because that is what your business is all about Although, in some cases your customers will provide all the cleaning tools and products, you still have to buy equipment, such as vacuum cleaners, brooms, mops, cleaning chemicals, washers, etc.
You can also start your business with your personal cleaning tools that are available at your home and later invest in commercial ones. Nowadays, the term ‘organic product’ and ‘no-chemical’ are trending. Buy such products to create a unique selling point while pitching your services to clients. If you don’t want to purchase all the equipment in the beginning, you can rent them as and when required. This will reduce your start-up cost considerably.
Some of the common equipment and supplies you must need are:
- Vacuum cleaner
- Cleaning uniform or apron
- Window cleaning
- Paper towels
Step 7: Establish Your Brand
If you want to establish a great trusted brand, you need to talk like and seem like a professional. Create a bond insurance that acts as a financial guarantee. It will shield you and your clients from unrealistic obligations and losses. Make a contract between you and your client. In the contract mention the details that go into servicing and also make sure you add the values, such as what they can expect from you and how you are different from your competition.
For instance, you can use environmental-friendly products as your unique selling point or provide clients a personalized experience, with customized services or you can offer value-added services as promotional promise. Bring in as many unique touch points as you can to establish a sustaining brand image.
Step 8: Set Your Rates
Rates are an important factor in the cleaning business, and you should spend a good amount of time researching the market, your competitors, customer expectation, and your service quality to set your rates.
Other factors you need to consider while looking at pricing structures are your location, your clientele, the size of the home, the condition of the home, the number of days it would take to complete the cleaning work and the complexity of the work.
You can consider charging two types of rates – Flat Rate and Hourly Rate
Hourly rate is the standard charging method that customers prefer from cleaning services. Conduct your research and include all expenses, such as labor, equipment use, gas, the complexity of work and other products to come up with a competitive price.
Flat rates are usually charged when you know the work is common or frequent. For example, you can charge a flat rate for your loyal customers and the houses you provide service every other month. Make sure you calculate your rates wisely so that you do not end up working more for a lesser price.
Step 9: Market Your Business
Since you will be working with limited capital, it is important that your marketing efforts need to be bang-on. You can go with both online marketings, such as social media marketing and SEO and offline marketing, such as cold calling, flyers and business card distribution, distributing free coupons and direct sales.
For online marketing, you will need to build a responsive website for promotion and affiliation. Consult a cost-effective digital marketing expert for comprehensive information and services.
Make sure your foundation is strong, i.e., you know your costs, your business model, your marketing strategy, and your capabilities in doing the job. With the help of our guide, you should be able to start working on your business plan and implement the process. Comment below for further questions and discussions.