There are many people today who are starting their own businesses. In doing this, they have a number of different choices.
One of the most popular – and potentially lucrative – of those is a residential cleaning company. This is an industry that is currently in very high demand.
There are many benefits to starting a residential cleaning company – beginning with the fact that requires only a very small amount of funds to get established.
In addition, this type of business requires no special training or experience – and, it may be started on a part-time basis.
Therefore, you can continue with your present job while you establish and build up a client base with your new cleaning company.
Owning a residential cleaning company can also provide you with high profit margins.
Because of its low expenses, your net profit percentage can bring your company into the black relatively soon after your company gets going.
Before getting started, however, it is important to know how to start a home cleaning business from the beginning.
That way, you will have an in-depth understanding of what is required from start to finish.
Required Steps for Opening a Residential Cleaning Company
When working through the steps of how to start your own cleaning business, there are several key factors that must not be overlooked. These should include the following:
Creation of a Business Plan
Your business plan will play an essential role in your residential cleaning company’s overall success.
This document will provide an overall summary of your business, along with a detailed plan of action as to how the company will start and grow.
In it, you should describe how you will acquire your clients – including your plans for marketing and promotion – as well as the rates you will charge, and the services you will provide.
The business plan should also include detailed financial information such as an income statement and cash flow information.
This data is especially important, as a bank or lender will want to review it in the event that you apply for any type of business funding or loan.
Naming of Your Company
The name that you give to your company is also important.
While you may initially consider your endeavor as just a way to make extra money, it is truly a business, and it should be named as such.
Therefore, get creative with it.
When brainstorming for good, catchy company names, you should ideally think of things that will resonate and be memorable in potential customers’ minds.
For example, “Clutter Busters” is something that people will remember, and it gives them an idea of the type of service your business provides. Before you nail down a name, though, be sure that the name isn’t already being used by another company in your area.
You can check this information online through a company directory.
Form a Business Entity
While many business owners remain as a sole proprietor, there are others who form a corporation or a Limited Liability Company (LLC).
There are a number of tax and legal protections that you are afforded when you do so.
Therefore, check with a tax or legal professional on the benefits of the different types of business entities and whether you should consider having your business become such an entity.
Decide on Your Target Market
You will also need to determine who your target market will be.
Even though you are entering into the residential cleaning business, your target market won’t likely be all homes in all locations.
Instead, you should ideally focus on a particular geographic area such as specific neighborhoods.
Or, you may instead want to focus on a specific type of home such as condominiums.
Set Your Rates
Rates are extremely important, as they can make or break your company’s profitability.
There are several different factors that will go into determining the amount that you should charge your customers.
These include your expenses and your time. Your expenses will include criteria such as your supplies, gas, and maintenance.
Other overall costs of doing business should also be factored in such as the costs of your licenses and insurance.
Most residential cleaning companies charge their customers an hourly rate.
So, you will need to come up with an estimate of how much it will cost you to complete certain jobs based on room size, type of floors (such as carpet versus hard wood), and other cleaning needs.
One way to get an idea of what rates to charge is to contact other residential cleaning companies in your area and obtain estimates of their rates.
You will likely find that most of the companies’ rates fall within a certain price range.
You should keep your rates somewhere within this range as well because while you don’t want to overcharge your customers, you also don’t want to undercut yourself either.
Open a Business Bank Account:
Before actually opening your residential cleaning company, you will need to open a separate bank account for your business.
This is because you are not allowed to “commingle” personal and business funds within the same bank account.
Most banks and credit unions provide special checking accounts that are specifically for small businesses.
These accounts usually provide you with a certain number of checks that you can use, as well as a debit card, and even a credit card for business use.
Be sure to ask your banker about any certain minimum balance requirements or maximum monthly usage fees before opening the account.
Obtain any Necessary Business Licenses and / or Permits
Most jurisdictions will require that you obtain certain business licenses and / or permits before doing business with the public.
Typically, a vendor’s license is required in order to open a cleaning business.
You can obtain an application from your county clerk or county administration office for this license. This particular license will allow you to collect sales tax from your customers.
Apply for Insurance Coverage
Be sure that you apply for any insurance coverage that you need as well. It is likely that you may have to have liability insurance coverage in case you become injured in a customer’s home, as well as if something were to break. Likewise, you may also need to become bonded.
Inquire with your property and casualty insurance agent about this type of insurance coverage and how much it will cost to purchase.
Hire an Accountant / CPA
When you open your residential cleaning company and you start to earn business income, you will also need to start filing business tax returns.
In this case, you may need to start working with an accountant or a CPA who can help you with business tax returns.
It is also a good idea to have a tax professional that you can call on to ask other types of tax and financial related questions of when certain situations arise.
Consult with an Attorney
Because legal issues can and do come up, you should also have an attorney on file just in case.
Obtain Necessary Business Forms
Before getting started, you will need to get several forms for use in your business.
These should include work orders that outline what your customers want to have done, estimate forms that show pricing estimates that you’ve given to your customers for particular jobs, cleaning invoice forms that describe the services you have provided to a customer, satisfaction survey forms for customers to fill out to detail how well your company performed, and breakage report forms in the case that items were broken at a customer’s home.
In addition, you may also want to have bad check notice forms just in case a customer pays you with a check that bounces.
Likewise, should you need to hire any independent contractors for jobs, it is a good idea to have independent contractor forms that outline the specific job responsibilities that the person is hired to perform.
These forms should also include a statement that ensures you that the independent contractor will not steal your customers.
Ideally, you should have your company’s name and logo on these forms so that everything – including your forms, business cards, and advertising materials – all have the same “branded” look and feel.
This will give your company a much more professional look in your customers’ eyes. Although you may not use all of these forms on a regular basis, it is a good idea to have them on hand just in case they are needed.
If you have them in a downloadable format on your computer, you can print them at any time.
Start Marketing and Promoting Your Business
One of the most important steps that you will need to take in preparing to start your residential cleaning business is marketing and promoting it.
Regardless of the type of services you offer or the market that you serve, if nobody knows that your company exists, then it isn’t likely that you will be very successful.
Therefore, you will need to come up with a good marketing plan for getting the word out about your business.
There are numerous ways to do this. One popular method of marketing residential cleaning services is to offer a coupon in the local coupon mailer that is sent out to certain geographic areas.
Here, you can target certain neighborhoods and offer a promotion such as one free room cleaned with additional purchase.
You may also consider advertising in the local newspaper, printing flyers, and doing local radio commercials.
Today, most businesses also have a website. This is a great way to expand on the services that you provide.
You may also want to provide a printable coupon on your website as well. In any case, you will want to have business cards printed.
That way, you can hand out a card to everyone you meet who may have a need for your services.
Who is Your Ideal Target Customer ?
All businesses should have an ideal target market. Therefore, you should really focus on who you will focus your advertising and promotion on.
For example, will you pin point a certain neighborhood or neighborhoods in your region, or will you instead focus on a particular type of home such as apartment units or condominiums?
By targeting your customers, you can also focus your advertising – and by doing this, your potential customers will truly feel that your ads are speaking directly to them.
When this occurs, they are much more likely to respond to your ads and use your company’s services.
What Equipment Will You Need ?
In order to get started with your residential cleaning business, you will need to have some necessary equipment on hand. At the very minimum, you should have the following items:
- Vacuum cleaner with attachments
- Mop and bucket
- Steam cleaner
- Paper towels
- Toilet brush
- Toilet bowl cleaner
- Dust pan and brush
- Dry mop
- Window cleaner
- Disinfectant cleaner
- Furniture polish
- Soft scrub for sinks
- SOS pads
- Feather duster
- Rubber or latex gloves
Depending on exactly what type of equipment you have, you may need to use a van or other type of larger vehicle.
This will make it easier to transport all of your equipment from location to location, loading and unloading it for each of your jobs.
Is a Franchise or Starting a Business From Scratch Better for You ?
One of the biggest decisions that you will need to make when deciding how to start my own cleaning business is deciding whether to create your company from scratch or to buy into an already established franchise.
Certainly, there are both advantages and drawbacks to either of these options. Some of the benefits of going with a franchise model include the following:
When buying into a franchise, you can start your business almost instantly. This is because most of the initial work has already been done for you.
This helps to avoid a great deal of the learning curve – and many of the newbie mistakes – that a new business owner out on their own might make.
As an example, the franchisor has already taken care of creating the overall business model – and possibly even the business plan – so that all you have to do is follow the steps and get the business up and running. In many ways, buying a franchise allows you to simply “open the box and follow the directions.”
High Brand Awareness:
In many instances – especially if you go with a well known name – your business will already be a household name.
When customers are already familiar with your company name, it is much easier to build trust and to sell them on your services.
This can be a key factor when customers are inviting you into their home to clean around their personal items.
Advertising and Marketing
When you buy into a franchise, you will also have a great deal of assistance with marketing and advertising.
There are many bigger companies that will even go so far as to create large multi-national ad campaigns.
This is an ideal way to bring customers into your business, without a lot of effort on your part.
With a franchise, you will also have access to training.
Although a residential cleaning business doesn’t require a great deal of background or advanced training, there are certain aspects of the business that must be learned.
Having a large company to back you up can be comforting. In addition, if your company grows, a franchisor will typically take charge of training your new employees as well.
As a new business owner, it can sometimes feel like you are all alone.
But as a franchisee, you always have the support of the franchisor – regardless of how long you’ve been in business. This is another big benefit of this business model.
Oftentimes, you are able to simply pick up the phone and make contact with someone who can quickly handle a question or concern that you have.
While going the route of a franchise does provide a great many benefits, there are also a few drawbacks as well. These can include:
Expenses & Fees
In return for all of the training, support, and business plan models, there is a price to pay.
Therefore, one of the biggest drawbacks to going with a franchise is the expense that you must pay in.
This cost typically includes an up-front down payment, along with ongoing fees that are based upon sales revenue or performance.
As a franchisee, you also give up a great deal of control over your business in comparison to the amount of control that an independent business owner would have.
Those who own their own firm typically are able to call their own shots. When purchasing a franchise, though, you will usually be required to sign an agreement that states you will follow the company’s rules and regulations as to operating the business.
You may also be required to purchase specific equipment and inventory.
When working with a franchise, the franchisor typically chooses the site locations. With this in mind, they – not you – usually own the building and the underlying real estate.
Any of the equity that is built from that will therefore be passed on to the franchisor.
Profits / Company Value
Likewise, if your company attains substantial value and could essentially be sold for considerable profit, a franchise would not enable you to do this, whereas owning your own company would.
Is the Residential Cleaning Business Right for You ?
There are many factors that are involved in actually starting a residential cleaning company.
Yet, in addition to the step-by-step actions that must be taken as to how to start cleaning, business requires that you have a certain mental attitude or readiness as well.
For example, other than simply asking “what do I need to start a cleaning business,” there are some additional questions that you should ask yourself as well in order to ensure that the residential cleaning business is right for you, such as:
- Am I interested in the potential to earn a full-time income while working part-time hours?
- Do I have the ability and the time to prepare to start my business over the next two to three weeks before any income can be earned?
- Am I willing to put forth approximately $500 in capital in order to purchase the necessary cleaning equipment that I will need to get started?
- Do I want to start my new business working from my home in the evenings and/or on weekends ?
- Am I willing to take the time and the effort to do the marketing and the promotion that is required to build up a client base of residential cleaning customers?
If you answered yes to most or all of these questions, then it is likely that starting a residential cleaning company is the right business for you.
In this case, you will next need to determine whether you should start your company from scratch or if a franchise model is the better route for your particular business needs and goals.
Taking the Next Step
Now that you know how to start a cleaning service business, you are ready to take the next step.
Be sure that you go through all of the steps that are necessary to get your company started the right way.
When you do, you will be able to move through the process quite quickly. Remember, the residential cleaning business is a high demand industry, so it is likely that your business will grow fairly rapidly once you get started.
Whether you opt for your own company or the business franchise model, running your own residential cleaning company can be an extremely rewarding endeavor.
Through it, you will be able to set your own hours, as well as decide who you want to work with. You can truly have the opportunity to make your new business thrive.