Best Products To Sell On Amazon (and What You Shouldn’t)


May 23, 2023

Best Products To Sell On Amazon (and What You Shouldn’t)

The Amazon marketplace handles 40% of U.S. e-commerce sales and has more annual sales than all but 11 countries. That’s a huge business, and there’s room for more sellers to get their share. But first, you have to answer an important question: what are the best products to sell on Amazon?

We’re going to provide information about selling products on Amazon from the business owners of companies like ShedDefender, Pooch Selfie, and from owners like Michael Jackness and Ryan Hogue. These four businesses make a combined $200K per month selling products on Amazon. 

Get ready to learn everything you need to know to find the best items to sell on Amazon.

Is it Profitable to Sell on Amazon?

If you’re wondering whether selling on Amazon is worth the effort, the answer is clear: definitely, it is! And it’s easy to get started. 

We talked with several business owners who shared their positive experience with Amazon sales.

Michael Jackness, the cofounder of Ecom Crew told us:

I always recommend starting on Amazon. They have everything that makes a good ecommerce site: Eyeballs, Fulfillment, and Traffic.

Casey Walters, the owner of Shed Defender, told us that his Amazon selling accounts for about 65% of his business’s sales. He also told us:

Our margins are 40-70% depending on the sales channel: Amazon, our website, or wholesale.

Check out our interview with Casey below.

Now that we know you can count on making a profit with your Amazon business, let’s look at why you should choose Amazon over other e-commerce platforms.

Why You Should Sell on Amazon

selling on amazon

You should sell on Amazon for several reasons:

  1. Amazon had over 2.4 billion views in March 2023, according to SimilarWeb. (Only Google, YouTube, and Facebook have more.)
  2. Amazon categories make selling items easy.
  3. Fulfillment by Amazon (FBA) handles fulfillment, shipping, and quality control so you can focus on growing your business.
  4. Amazon has the most sophisticated logistics network on the planet. This helps you provide better service to your customers.

Next, let’s look at what to sell on Amazon.

Features of Best Products to Sell on Amazon for Beginners

Before you open your Amazon store, doing a bit of research about what products are easy to sell will pay off in the long run.

Michael Jackness told us:

Picking the right niche and market is really important.

The best product to sell on Amazon will have the following characteristics:

  • Low Competition
  • High Demand For the Product
  • Low Shipping Costs
  • $10-$100 Selling Price
  • Small Dimensions and Weight (These factors impact the Amazon seller costs.)
  • Lower Amazon Commissions
  • High Profit

Michael had another great tip:

The window is closing on “me too” products. At least tweak or package offers to make it more difficult to copy.

Check out our interview with him below.

Keep reading to find hot-selling items on Amazon with low competition.

What Are the Best Products to Sell on Amazon?

Based on our criteria above, we used Jungle Scout’s Opportunity Finder from 4/12/23 to find very low competition keywords that sell at least 1,000 per month at a value of $10-$100 with a niche rating of 6-10. We also excluded big brands and highly seasonal items. It produced 266 products across the following product categories:

Top Performing Categories
Category Rank Results in Top 200 Percent of Top 200
Toys & Games 1 38 19.39%
Health & Household 2 31 15.82%
Beauty & Personal Care 3 29 14.80%
Grocery & Gourmet Food 4 23 11.73%
Clothing, Shoes & Jewelry 5 18 9.18%
Baby 6 15 7.65%
Home & Kitchen 7 12 6.12%
Kitchen & Dining 8 9 4.59%
Tools & Home Improvement 9 5 2.55%
Pet Supplies 10 (Tied) 4 2.04%
Sports & Outdoors 10 (Tied) 4 2.04%
Patio, Lawn & Garden 10 (Tied) 4 2.04%
Cell Phones & Accessories 13 3 1.53%

(Not familiar with Jungle Scout? We’ll explain this helpful research tool and others like it later on in the article.)

Let’s take a closer look at the items that made up the best sellers in each category to spot opportunities for your business to sell on Amazon.

Games and Toys

assorted toys for the kids on the table

According to Jungle Scout, toys and games were the most purchased product category with nearly 20% of the top 200 top product ideas. The most popular selling items during this time were:

  • Easter Items: 12 of the top selling items 
  • Squishmallows: 7 high performing keywords
  • Fake Money: 4 high performing keywords
  • Buffalo Puzzles: 3 high performing keywords
  • Water Guns: 3 of the top selling products under $100
  • Pool Floats: 2 appearances on the list -ne for swimming floats for kids/babies, the other for adults floats
  • Chuckle and Roar: 1 appearance for the popular board game
  • Thomas and Friends: 1 appearance

Amazon sellers should be aware that this product market niche is going to be highly seasonal because popular toys are changing frequently.

Health & Household

The next most commonly sold items come from the health and household category. There were 31 high-demand products on this list, including:

  • Tejocote: 7 appearances for this Mexican root that provides vitamins, minerals, and appetite suppression
  • Pain Relievers/Headache Medicine
  • Triple A Batteries
  • Drain Cleaner
  • Other Vitamins and Minerals
  • Cleaning Products

Beauty Products & Personal Care

woman putting a make-up with screenshot of amazon beauty products on the background

Beauty product ideas include items like:

  • Travel bags and razors
  • Hair dye
  • Sunscreen
  • Soap, Shampoo, and Conditioner
  • Body Scrubs 
  • Lash Growth Stimulating Products

Grocery & Gourmet Food

Food products are among the popular categories for Amazon buyers, with 23 items that have low competition amongst Amazon sellers. You might want to consider:

  • Candy (especially for approaching holidays)
  • Orange Juice
  • Energy Drinks
  • Coffee and Creamer
  • Powerade
  • Soda
  • Eggs
  • Peanut Butter and Jelly

Clothing, Shoes, and Jewelry

Clothing, shoes, and jewelry all make good product ideas to sell on Amazon. High ranking profitable products for Amazon sellers include:

  • Toddler Shoes and Sandals (specifically sizes 6, 9, and 10)
  • Matching Outfits
  • Gynecomastia Compression Shirts
  • Plaid Shirts
  • Kids Crocs
  • Taylor Swift and Sublime merch
  • Cable and Gauge Tops

If you’re feeling inspired to get started, first have a listen to Ryan Hogue as he explains how he makes $30K on Amazon in our podcast below.

Ready for more ideas to sell in your Amazon store? Read on.

Baby Products

toddler facing down with a baby products beside

There is consistent demand on the Amazon store for baby products, including:

  • Breastfeeding Equipment and Storage for Milk
  • Hello Bello Diapers
  • Pacifiers and Accessories
  • Baby Pillows 
  • Airplane Beds
  • Wash Cloths
  • Baby Wash/Shampoo
  • Mama Bear Diapers

Home & Kitchen

The home and kitchen category has a lot of demand without too much competition for the following products:

  • Candles
  • Decorations for Shelves
  • Curtains
  • Waterproof Sofa Covers
  • 15th Birthday Party Items

Kitchen & Dining

Some low-competition products that are in high demand while online shopping are:

  • Cruise Ship Magnets
  • Slushie Cups
  • Bread Mats
  • Seasonal Tablecloths
  • Cakepops 
  • Gifts for Women
  • Pink Dish Rack
  • Dash Griddle Mini Maker

Tools & Home Improvement

guy in a construction suit holding a laptop with tools and equipment on background

The tools and home improvement category  has consistent sales in:

  • Wall Paper & Vinyl
  • Painter’s Tape
  • Oven Racks
  • Tabletop Water Dispensers

If you start selling these products, you won’t be competing with many other sellers.

Pet Supplies

Another popular category to sell products is pet supplies. There are some products I was surprised by that are easier to rank, including: 

  • Dog Whistles
  • ChomChom Rollers (pet hair removal tools)
  • Cat Scratch Carpet Protectors
  • Fancy Feast Purely

If you choose to sell items in these profitable product categories, don’t forget to carry things like leashes, cat boxes, collars, and pet food. For more ideas on selling pet care items, find out how Casey Walters started ShedDefender and makes over $150K per month on Amazon.

Sports & Outdoors

You’d be surprised by some of the things that end up in best-selling categories. Jungle Scout suggests someone start selling:

  • Baseball cards packs
  • 5 gallon bottles
  • Potable aqua
  • Pushup board for men

You can always go with staples like camping equipment too.

Patio, Lawn, and Garden

man holding a paper holder board with garden equipment on the background

Surprisingly, all the easy keywords were about trapping mice and rats habitating in your garden. If you look at the best sellers in Amazon Marketplace, you find a completely different story. The garden best-selling categories include items like:

  • Propane Heaters
  • Tractor Rakes
  • Farmers Almanac
  • Waterfall Kits
  • Sheds
  • Sunbrellas
  • Outdoor Furniture

Electronics/Cell Phones & Accessories

I used ahrefs to investigate the search volume of certain keywords on Amazon, and it showed some interesting numbers within the electronics categories. Nearly 60% of searches involved electronics, which is weird because you’d think if so many people research products on there that there would be some crossover between the ahrefs results and Jungle Scout. My guess is that with so many sellers, the electronics are highly competitive. Items that make this list include:

  • Computers
  • iPhones and accessories
  • Headphones and ear buds
  • All video game systems
  • Security systems like Ring
  • Mice, keyboards, webcams, and other computer accessories

We’ve given you all kinds of ideas to find your own niche market. What will you start selling on Amazon?

Amazon Restricted Products

screenshot of restricted products from amazon website

At this point, you know everything you could possibly want to know about top selling Amazon products, but what about Amazon seller restrictions?

Restricted products on Amazon include 41 categories. For some categories you can’t sell at all, and for others you have to follow specific rules. Just make sure you read the rules for each category in which you sell. Review Amazon’s restricted categories page before selling stuff on Amazon.

Can you sell alcohol on Amazon?

Maybe. Amazon does allow wine sales, but there is a catch. Many states do not allow direct-to-consumer sales of alcohol, and it is the seller’s responsibility to follow all state and local laws. There’s a loophole though. As an online business, you are allowed to sell brewing kits with all the ingredients to brew alcohol.

Learn more about Amazon’s alcohol policies.

What Is an Amazon #1 Best Seller?

man holding a notes with stack of product boxes on the background

An Amazon best seller rank compares the current sales and the sales history. If a product is ranked #1, it means that it is the most sold item on Amazon in that category during the specific hour. The most bought items on Amazon may be shown for the entirety of Amazon, but each store also shows their trending items on Amazon.

How to Find the Best Products to Sell on Amazon

There are a lot of ways to perform product research as an Amazon business. Aside from Jungle Scout, other sources for researching profitable products include:

  1. Amazon’s Best Selling Products
  2. Researching Competitors’ Stores
  3. Keyword Research
  4. Find Private Label Products to Sell on Amazon
  5. Use Retail Arbitrage to Source Amazon Products
  6. Find Direct-Source Products on Amazon
  7. Check Out Other Marketplaces
  8. Avoid Big Brands
  9. Consider Selling Custom Print-on-Demand Products on Amazon
  10. Reverse Engineer Top Industry Amazon Affiliate Publishers

Let’s look at each of these resources in greater detail.

Amazon’s Best Selling Products

Amazon knows what their customers want better than any third party. They know their exact search volume, click-through rate, and top purchases. Other sites that report on Amazon sales can only pull the information from Amazon and try to guesstimate their algorithms. 

Knowing this, the first step you should take is to review Amazon’s best sellers page. It will give you a good idea of what product categories and items sell well. The picture below shows the top-selling items at the time of writing.

amazon category best seller

Research the Competition

Next, you’ll want to use product research software like Jungle Scout or other Amazon seller tools. These sites help an e-commerce business:

  • Identify top-selling products
  • Track performance over time
  • Find high-performing keywords
  • Source products
  • Create optimized product listings
  • Learn about selling items on Amazon

Read about other product research tools.

Keyword Research

laptopon the table with screenshot of ecommerce business article from upflip website

Once you perform product research and decide what items to sell online, You’ll need to perform keyword research to find:

  • Search Volume
  • Sales Volume
  • Price
  • Keywords for Title and Product Description

You’ll also be able to view recent and historical sales to get an idea of whether the average price and search volume are increasing or decreasing. 

New to keyword research? Our article on starting an eCommerce Business has more tips. 

Find Private Label Products to Sell on Amazon

Private label selling can be highly profitable if there is an untapped market. If you find items that are completely missing from Amazon selling, find a way to source them and start selling before other sellers realize they can underbid you.

Use Retail Arbitrage to Source Amazon Products

screenshot of how to sell on ebay article from upflip website

Retail arbitrage is a method of finding products that are being sold at a lower price at one site or retailer, buying them all, and then selling them somewhere else. 

Many of the best things to sell on Amazon may be discontinued or limited edition items. Amazon top sellers can often buy trending products at retail prices, mark them up, and then make two or three times the manufacturer’s suggested retail price. 

These items become trending products on Amazon and other e-commerce platforms. Learn more about an eBay seller’s retail arbitrage tricks and try them with Amazon trending products.

What Can You Sell On Amazon: Direct-Source Products

If you can bypass the wholesaler and go straight to the manufacturer, this will lower your cost per item dramatically—but you’ll have to buy more of each product.

This is both a benefit and a potential risk because your storage fees will increase, but your gross margin will also increase. As long as you can sell the items within a month, you shouldn’t be hit with huge storage fees.

Check Out Other Marketplaces

screenshot of cnetshopping from chrome webstore

Another place to find best selling products is on other websites. You can use a tool like CNET shopping extension to find places online that sell a product for a lower price.

Avoid Big Brands

Top-selling items on Amazon are often big name brands. These won’t be the most profitable items to sell on Amazon because you have to have a:

  • Higher seller’s rank
  • Better SEO strategy
  • Lower product cost

As a new seller, you are unlikely to be able to compete with big brands that are offering top-selling products on Amazon. 

(There may be some exceptions to this. For instance, if one of your toys makes the best Amazon items list, you might be able to add batteries for it and be able to upsell customers easily.) 

Copy Amazon Affiliate Strategies

Influencers are in all the selling categories. They know how to build their own brand, and they can turn ordinary things into trending Amazon products. Find the best influencers in your industry and study what they do. When they release a new video for a product, put those trending things on sale.

Use Google Trends

man holding a website with a google trends page mockup

Google Trends shows you what is trending on the world’s largest search engine. Trends on Google can soon become some of the best products on Amazon. Just be aware that the Amazon best selling products change fast. 

Make sure to check whether the hot items to sell on Amazon are short-term or cyclical. A celebrity blooper is probably short-term, while NFL merchandise is cyclical because it will have another season the next year.

What Is the Best Selling Strategy on Amazon?

There are four main ways of selling on Amazon. They each have their pros and cons, and if you want to achieve sustainable growth, you should consider each of the strategies and your own products before deciding. We’ll discuss each of the strategies below.

  • Amazon FBA
  • Amazon Merch
  • Print-on-Demand 
  • Digital Products
  • Fulfillment by Manufacturer

Let’s first find the best items to sell on Amazon FBA.

Amazon FBA

woman working on a laptop

New sellers will want to consider using Fulfillment by Amazon (FBA). Both Ryan and Casey use Amazon FBA. Ryan told us:

When you sell Amazon through FBA your products become Prime eligible.

The top sellers on Amazon typically use this strategy because it improves their shipping costs, customer service, and click-through rate. 

Most products will work well with Amazon FBA, but larger products can get more costly quickly because of the storage costs and shipping fees. We discuss this strategy in our FBA blog.

Amazon Merch

Amazon Merch is Amazon’s print-on-demand service. New sellers that just want to sell shirts, hoodies, tote bags, phone cases, pop sockets, and throw pillows will want to apply for this business model. Amazon approves designs and starts selling them on the website. You’ll get between 80 cents and $3.00 royalty for each of your products Amazon sells. Products qualify for Amazon Prime too.

Print-on-Demand

Most print-on-demand companies don’t qualify for Prime membership like Amazon Merch. It normally takes two weeks for the customer to receive the product. 

The benefit of working with Print-on-Demand companies is that other companies like Printful have more of the most profitable product categories. They can also be connected to other e-commerce sites. These are best for products that Amazon merch does not offer.

Digital Products

screenshot of kindle direct publishing from amazon website

In case you’ve forgotten, Amazon started as a bookseller. Needless to say, one of the best products to sell on Amazon is books. You can sell books as ebooks and paperbacks. This service is called Amazon Kindle Direct Publishing or (Amazon KDP).

Fulfillment by Manufacturer

If you use other e-commerce sites and do your own manufacturing, your own private label business might want to fulfill orders. The problem with this is you have to have more monthly sales volumes to pay for the location and all the shipping.

This strategy is normally used by higher volume sellers who have developed a reputation and can benefit from higher sales margins when people visit their own website.

Where to Get Products to Sell on Amazon

You can get products to sell on Amazon from the following locations:

  • Dropshipping Companies
  • Wholesalers
  • Private Label Sellers

Let’s look at each way to buy the most sold items on Amazon.

Dropshipping

young woman carying a stack of product boxes

Buying from dropshippers can be a good way to get Amazon top-selling items. When you work with a dropshipper, you are mostly focused on the keywords and marketing for the top Amazon products. The dropshipping company will ship the products once you pay for the things you sell on Amazon.

Wholesale

Wholesaling is buying items from a manufacturer or distributor in bulk then marking up prices on those the best selling Amazon products. This method normally helps you get the best items on Amazon at a lower price per item, but your overall startup costs will be higher. Check out our blog about how to get your products in stores to learn more about wholesalers.

Private Label

screenshot of product development article from upflip website

A private label requires designing your own products with the help of a manufacturer. You can talk to manufacturers on Alibaba or AliExpress to find suppliers that can help you create things to sell on Amazon. There are also locations in the U.S., but they are normally best for product development and small order sizes. Learn about manufacturing before you engage with a manufacturer.

Make Your Own Brand The Best Amazon Products

At this point, you know:

  • What sells the most on Amazon
  • Ways to identify the best Amazon finds
  • What can I sell as a new seller?
  • Where to buy products to sell on Amazon FBA

It’s important to remember that whether you’re selling locally or in international markets, the best selling products on Amazon are normally Amazon Prime eligible. When you ask yourself:

“What should I sell on Amazon?”

Don’t forget to consider whether it would also be one of the best products to sell on Amazon FBA. 

Here’s another thing to keep in mind: all the business owners we have talked to told us that customer feedback is critical, so make sure you understand how to get customer feedback without breaking the rules.

What Amazon most popular items are you thinking about selling?

Resources

Wonder where we got the statistics in the first paragraph? You can find them (and a lot of other great info) here:


80% of businesses fail... Learn how not to.

Learn from business failures and successes in 5 min or less. The stories, frameworks, and tactics that will make you a 10x better founder.


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Related articles

Did you know that it costs less than $5K to start a cleaning business, but with the right strategies you can make more than $1.5M per year?

Join us as we discuss how to start a cleaning business from scratch. We’ll explore Cristobal Mondragon’s remarkable journey from starting Queen Bee Cleaning Services in 2015 to becoming a featured speaker at cleaning conventions.

We’ll share his story, the strategies and lessons Chris learned from starting a cleaning business from home, general information about the cleaning industry, and how you can start one of your own. Chris told us:

[su_quote]This is the best time to start a cleaning business.[/su_quote]

[su_note note_color="#dbeafc"] Get ready to learn how to open a cleaning business. Click on any link below to jump to that portion of the article, or just read on.

This guide will show you exactly how to start a cleaning service. Let's start by discussing the Queen Bee Cleaning Services:

Case Study: Queen Bee Cleaning Services

Cristobal Mondragon and his wife started Queen Bee Cleaning Services in 2015. Today, he makes over $1.5M annually and has opened a second location. He’s been recognized by industry organizations for his excellence, and he’s used his success to expand into courses, customer relationship management, and coaching.

But it hasn’t been without challenges. Chris made the costly mistake of misclassifying employees as subcontractors, leading to a hefty fine.

That might stop many business owners, but he overcame the $10K hit and is passing his knowledge on to you.

Check out our interview with him below.

https://www.youtube.com/watch?v=d4Iip7BHXwg

Now, let's look at what you need to know about the industry before starting a cleaning business.

Cleaning Industry Outlook

Janitorial workers cleaning an office space

According to IBIS World, the contract cleaning industry made over $90B in revenue in 2022 and will grow to nearly $100B by 2027.

There are 1,163,718 cleaning companies in the U.S., so considering the revenue figure above, that means they average $77,122.63 in annual revenue each. With wages being approximately 38.4% of revenue, that means it's pretty easy for cleaners who want to start their own business to take home around $45K after expenses.

Chris provided a spreadsheet of his accounts, which I modified to make his accounting match IBIS World's database for an easy comparison. His strategies help him earn nearly double the after-tax profit and nearly four times the take-home pay of the average cleaning business owner.

[su_table responsive="yes" alternate="no" fixed="yes"]

Year Converting Industry To Average Business QueenBee (Using Numbers Adjusted For Income Privacy)
2022 Ind Revenue in Millions $89,749.00
Industry Revenue $89,749,000,000.00
Number of Businesses 1,163,718
Rev/Est $77,122.64 $1,130,896.00
COGS $30,463.44 $895,841.20
Gross Profit $46,659.19 $235,054.80
Salaries $11,876.89 $80,000.00
Other Expenses (Most likely rent, utilities, etc. that pertain specifically to running a home-based business) $31,157.55 $55,296.00
Net Income $3,624.76 $99,758.80
Approximated Owner's Earnings $46,659.19 $188,758.80
Net Income Percentage 4.70% 8.82%
Owners Income Percentage 60.50% 16.69%

[/su_table]

Get ready to find out the answers to these frequently asked cleaning company questions. We’ll answer questions like:

  • How much can a cleaning company owner make?
  • How much money do I need to start a cleaning company?
  • What is the easiest cleaning company to start?

How profitable is starting a cleaning business?

According to The BBQ Cleaner, cleaning services can earn between $20K and $100K in annual profit. A solopreneur cleaning business normally makes around $50K per year.

The Janitorial Store estimates the average profit margin for commercial cleaning businesses is between 10% and 15%. Profitability will vary based on your location, target market, pricing strategy, and the size of your business.

The factors below could make your cleaning business profitable:

  • High Demand: Most wealthy families and businesses need cleaning professionals.
  • Growth Potential: Cleaning businesses can grow from a one-person operation to cleaning business dynasties with locations across the country or world.
  • Low Overhead: Cleaning businesses have low startup costs and are commonly run from home.

How Much Does It Cost to Start a Cleaning Business?

Chris started Queen Bee with less than a $5K budget. He estimates you can start for less than $2.8K if you have a car. You can expect around 50% of earnings to go to payroll, including your wages. Another 30% of revenue will be spent on bookkeeping, advertising, overhead, and taxes.

Udemy offers inexpensive courses on budgeting that are worth checking out. Many cleaning companies love using Jobber as their cleaning business software to help lower costs.

What is the best type of cleaning business to start?

Residential cleaning is the easiest type of cleaning business to start because it requires less initial investment than business cleaning services or specialized cleaning services.

You might also consider starting the following:

  • Commercial Cleaning Company: Cleaning services for offices, manufacturing spaces, and commercial spaces make higher profits but have higher startup costs.
  • Specialized Cleaning: Upholstery cleaning, vehicle detailing, closet organization, mattress cleaning, and clothing cleaning services require additional knowledge to provide proper cleaning techniques, but they have less competition and a narrower target market.
  • Other cleaning services: Carpet cleaning, chimney cleaning, window cleaning, and crime scene cleaning are all high demand cleaning solutions in local markets.

Consider Cleaning Certifications

Completing International Sanitary Supply Association (ISSA) certifications will land you on their database of certified professional cleaners. That's a high-authority link to your website!

Queen Bee has a certification from the Association of Residential Cleaning Services International (ARCSI) as well as the Institute of Inspection and Restoration Certification (IIRC). He told us:

[su_quote] ARCSI certification teaches you how to use chemicals properly and avoid creating toxic fumes. It basically comes down to teaching you the chemistry behind each product and how to clean each [surface] … and avoid damaging them. [An] IIRC certification is similar to the ARCSI certificate but focuses on carpet cleaning and tile cleaning.[/su_quote]

Find out about more than 45 cleaning certifications.

Learn to Run a New Cleaning Company Successfully

Get FREE training for building your cleaning business with Chris Mondragon's webinar, “How to Start a $125K Per Month Cleaning Business From Scratch.”

During this FREE training, Chris will share his proven secrets for starting your own 7-figure cleaning business in just one week. You don't want to miss this rare opportunity to learn from this multi-million-dollar cleaning business entrepreneur for free!

How to Start a Cleaning Business

Home cleaner carrying a bucket of supplies

Starting a cleaning service company doesn’t have to be hard. We've outlined the process for starting a successful cleaning business in nine steps:

  1. Choose a target market.
  2. Choose your specialty.
  3. Create a cleaning business plan.
  4. Fund your business.
  5. Register your business.
  6. Price your services.
  7. Find clients.
  8. Invest in advertising.
  9. Hire a cleaning crew.

Let's start by discussing what cleaning company customers to serve.

Step #1. Choose Your Target Market

You need to understand who your target clients are to run the business successfully. Do some market research to find out where they are located.

A house cleaning business will normally do cleaning jobs for more affluent homeowners, while an office cleaning company will be looking for new business owners. Both groups can benefit from finding prospective clients who are unhappy with their current provider.

Take some time to do market research about how to align your brand and company values with the target market. Then choose a cleaning business name.

Next, you’ll learn what cleaning company services to provide.

Step #2. Choose the Type of Cleaning Business to Start

Research different types of cleaners and establish what is right for you. Specialized services tend to do particularly well. We created a list of cleaning company types and what they offer. Consider starting some of these cleaning businesses:

Offering a variety of services can help you reach more clients. Queen Bee Cleaning Services provides house cleaning (including Airbnb and move-out cleaning), janitorial services, carpet cleaning, and hospital-grade disinfectant services. Chris told us:

[su_quote] Recurring house cleaning is our bread and butter. Move-in and move-out services can have some surprises. Airbnb can be really profitable when you get it right. [/su_quote]

Next, you’ll learn what goes into a business and marketing plan for a local cleaning company.

Step #3. Create a Cleaning Business Plan

You need a business plan to help guide your decision-making. It keeps you focused. The plan will help define your vision, target market, objectives, startup costs, and strategy to get potential clients.

A business plan is a living document that will help you secure financing and help you manage logistics better than other small business owners. Make sure you write one!

Try out our business plan templates and resources below as you learn how to start a cleaning business.

Establish a Location

Most cleaning businesses operate from home for the following reasons:

  • Home-based businesses have lower startup costs.
  • Equipment and supplies can be stored at home.
  • A room in the home can be converted into an office.
  • Work is performed on an external job site.

Chris runs his small business from home, and when we interviewed him two years ago, his business expenses for rent and utilities were only $750 per month. He even told us most of those expenses actually helped the business from an accounting standpoint.

However you plan to do your bookkeeping, don't forget to check the Municode Library to find the local ordinances about starting a home-based cleaning business.

Keep in mind that running a cleaning business where children and pets live can be dangerous. Cleaning materials can be toxic, and some are explosive if combined. The EPA offers guidance on handling household hazardous waste.

Templates and Resources

These business plan templates and resources will help you prepare to get residential and commercial cleaning jobs. Want to know the best part? They're all free!

Also, check out our interview with Mike regarding business plans. Mike offers lawn care services, but his advice applies to commercial cleaning services. Plus, his small business is one of the fastest-growing franchises in the country.

https://youtu.be/Seac5PbUZXk?si=42fVImtwTT6DfATH

Create Standard Workflows

Chris has tons of resources to help you start your own cleaning business. Check them out in his free training course.

He emphasizes the importance of getting every facet of your process documented to create workflows. His clients appreciate the transparency he provides with his pricing. You can be confident in your endeavors if you seek to model your business after Queen Bee.

Get Cleaning Supplies and Equipment

Your cleaning supplies depend on the services you provide, but you can start by purchasing equipment like a vacuum cleaner, window cleaner, and a few microfiber towels.

For more information about what cleaning equipment you'll need for a maid service, check out our guide. It's effectively a cleaning business starter kit!

Chris even offers a hospital-grade disinfecting service, which requires specific supplies. He told us:

[su_quote]We use an electrostatic sprayer to apply the disinfectant. The sprayer ‘loads’ the mist with a positive charge, making the disinfectant stick to all surfaces, killing 99% of the pathogens. Our hospital-grade disinfectant is an EPA-certified product safe to use around children and pets and safe on all surfaces.[/su_quote]

Next, we’ll discuss whether you need a business loan when you start your local cleaning company.

Step #4. Get Funding

Ever wonder why so many people get into the cleaning business? It has a low barrier to entry. The initial investment to start a home cleaning business can be one shopping trip to a home improvement store.

Funds to start your cleaning service can come from:

  • Personal funds: People commonly pull from their savings and paychecks.
  • Loan from family or friends: Sometimes friends and family are willing to help people start a business. At the very least, they might hire you to clean their homes.
  • Business partners: It's easier to get twice as much done if you have a business partner. They can be an active or a silent investor.
  • Government programs: Some people will qualify for Small Business Administration loans or other government grants.
  • Crowdfunding: If your business idea is something that can be scaled to sell all over the country, crowdfunding is an option.
  • Credit cards: Your business may need credit cards to pay for expenses. Each business purchase could earn some cash back and help build business credit. Like personal credit scores, business credit scores impact loan rates.
  • Home equity loan: Refinancing your home loan is a great way to get startup cash.
  • Rollover for business startups (ROBS): If you start an S-Corp or C-Corp, you can move your 401(k) from your employer to your new corporation and buy the company stock with the 401(k), giving your business an influx of cash. During operations, you can reinvest dividends into the 401(k) to increase the funds in it.

Check out our article about business funding. We cover 17 ways of funding a business to help you decide which practices are best for you.

Alternatively, the SBA offers free courses on financing options and funding programs. The Hartford published the pros and cons of using personal funds to start a business.

Don't forget to check out our lending partners.

Once you’ve got the money, it’s time to register your business and get your cleaning business license.

Step #5. Register the Cleaning Business

Once you have a business plan, you'll want to come up with a memorable name. Considering each of these aspects will help you beat out your competition:

  • Does it state what you do? If you wash windows, does the name or logo indicate you perform window washing? Don't be too specific, though, because businesses evolve.
  • Is it easy to remember? Potential customers will need to search your business name.
  • Does it indicate the location you serve? Major cities can be too big to serve in their entirety. Using local terms can narrow the audience and improve ranks on Google.
  • Does it communicate the brand message? Queen Bee Cleaning Services’ company logo is a picture of a bee along with the name of the company. Simple, right?

Queen Bee does a great job as a brand because it is the hive leader (best of the local residential cleaning businesses), but it doesn't clarify for potential customers where the service is, widening its potential customers.

Register a Dot Com

Top-down shot of a woman using a tablet to search for available domain names

Once you have a name idea, run it by your friends and family. Test it on Google Trends. Our business name generator connects you directly to NameCheap when you click on one of the business names. There, you can buy the domain name and other services.

Pro Tip: Aid your brainstorming even more with our ultimate list of cleaning business names.

Establish a Legal Structure and Register With the State

When you have your name, you'll want to choose a legal structure. Legal structures include sole proprietorships, limited liability companies, and corporations.

To establish a legal business structure, work with an attorney, accountant, tax specialist, or government official for the best results. Then you can register your business with the necessary state and local agencies.

Next, you'll want to get your business licenses.

Licenses, Permits, and Tax Forms

Regardless of the business structure, determine if your cleaning company requires a business license, permit, or a specific set of tax forms to operate legally. We researched each state to create our guide to cleaning business licenses. Alternatively, you can use the SBA tool to find out which business licenses you need.

Get Cleaning Services Insurance

A local business owner should purchase general liability insurance, especially if they serve commercial clients, which require it. General liability insurance covers property damage and bodily injury.

Check out our blog about how to get business insurance for more information. We recommend using Simply Business to find the best business insurance rates.

How to Start a Cleaning Business Franchise

A franchise consists of a franchisor company and a franchisee in a joint venture to sell the franchisor's products and services. In essence, a franchise enables you to enter the market with a ready-made cleaning company.

Many franchise opportunities exist in the cleaning industry. Well-known franchises are The Maids, ChemDry, and PuroClean. Learn more about buying a franchise.

At this point, you know how to set up proper licensing, but a successful business needs to provide consistent services and pricing.

Step #6. Price Your Services

Cleaners meeting with a new client in her home

A small business owner will need to establish how much to charge for cleaning services. Research reasonable prices to stay competitive while still making a profit.

There are three typical ways house cleaning prices are calculated by a house cleaner:

  • Hourly: $25 to $90 per hour, per cleaner
  • Flat fee: $100 to $800 weekly or biweekly for standard cleaning of a single-family home
  • Room rate: $100 for 1 bed/1 bath + $10 to $20 for each additional bedroom and bathroom
  • Per square foot: $0.05 to $0.10 per square foot

Learn more in our house cleaning pricing guide.

Next we’ll discuss how to get commercial cleaning contracts.

Step #7. Get Cleaning Clients

Building customer relationships is crucial for starting a cleaning business. Some of the best digital and traditional marketing techniques when you start a cleaning business include:

  • Market your business: Identify your target audience and the cleaning services they need. Then use social media, flyers, and local associations to promote your brand. You’ll also want a website to show potential customers the services you offer.
  • Get reviews: Client testimonials on social media or Google Business Profile help attract new customers. Make sure to ask for them and make them easy to provide.
  • Build a network: Local business and trade associations are great places for business networking and referral groups.
  • Use online marketplaces: Let people know about your services on marketplaces to help get low-cost leads.
  • Get referrals: Ask clients to refer their friends. Starting a cleaning company is easier when satisfied customers, friends, and family recommend your business to other people.
  • Offer discounts: First-time customer discounts often attract new clients. You can also provide subscription-based discounts for routine cleaning.
  • Optimize your website: Make sure your website directly answers customer searches.

Learn more about how to get clients for your cleaning business.

Chris reveals all these incredible tactics, plus his pricing structure, in his 7-Figure Cleaning Business Blueprint course. You get to see how Chris executes all the most important techniques from the course live.

It’s time to implement your marketing plan next.

Step #8. Invest in Advertising

Advertising and promotion marketing are important for starting any business, especially a cleaning service. In fact, marketing is one of Chris’s biggest expenses in his budget.

His marketing budget is an average of $4,212.50 per month. He spends primarily on Google Local Ads, but he also spends a portion on Yelp, Craigslist, and Facebook. He told us:

[su_quote] Craigslist ads are low-cost and have done really well. You should definitely include them [in the list of places you run ads]. [/su_quote]

Chris has become highly ranked on Google, Yelp, Nextdoor, Houzz, Thumbtack, HomeAdvisor, and Porch. Focusing on building your business presence on highly ranked websites helps increase your site's authority.

He shares his Facebook ad strategy in our master course. It's surprisingly simple but gets a return on ad spend of 16-41X.

You'll want to use a combination of:

  • Digital marketing: This includes email newsletters, social media, and search engine optimization. Neil Patel is a renowned authority in this area. Check out his website.
  • Printed materials: This includes business cards, flyers, brochures, T-shirts, and even car magnets. Canva is an excellent tool for designing your own business cards. And here's our guide for getting them cheap.
  • SMS marketing: Sending text messages is a highly successful digital marketing strategy.
  • Branding: Uniforms, vehicles, and customer service are all crucial aspects of marketing for residential cleaning businesses.

One of Chris's marketing strategies is putting door hangers on three houses in each direction after each cleaning. These fliers give first-time customers discounts. Many customers who took advantage of this sale were so impressed with the service they happily joined his subscription plans.

Pro Tip: Check out our article on how to get cleaning contracts.

As a business owner, you might have a goal for your house cleaning services to create jobs and make more profit. If you do, check out this next section.

Step #9. Hire a Cleaning Crew

Imagine what it would be like to have so many referrals and so much business that you can't handle it all yourself!

While many cleaning businesses are one-person operations, owners often find that it helps to have employees for practical and profit-based reasons. After all, you might want to take a vacation!

Before you hire employees, you must address the following:

  • Employer Identification Number (EIN): Get your business an EIN from the IRS. Apply for one online or call 800-829-4933.
  • Tax Filing and Withholding: The IRS publishes a handy guide for employers that is available here
  • Unemployment Insurance Tax: You will need to pay Unemployment Insurance Tax through the UI Program under the Social Security Tax for employers.
  • Federal Employment and Labor Laws: All employers must display workplace posters that are downloadable on the U.S. Department of Labor website.

Other requirements include:

  • Employment Eligibility Verification (Form I-9)
  • Reporting to your state's new hire program
  • Worker's compensation insurance
  • Disability insurance, as required by some states
  • Occupational Safety and Health Administration (OSHA) training

Compensating employees is probably going to be your most significant expense. It is for Chris. You can either pay employees an hourly rate or per task. Chris pays an hourly rate of about $19, but local businesses can choose which works best.

If you're a busy house cleaning company with lots of customers near each other, both you and the employees can benefit from performance-based pay.

Ready to Start Your Own Cleaning Business?

Now you have the tools and knowledge to embark on your path to success in the cleaning industry.

Remember, it's crucial to understand your target audience, choose the right type of cleaning services, and create a solid business plan. Proper funding, registration, and pricing strategies will lay a strong foundation for your business.

Once your business formation is complete, build a loyal client base through effective marketing and excellent service. Don’t forget to ask for reviews to ensure long-term success.

As your business grows, don't forget the importance of hiring and managing a reliable cleaning crew.

Whether you're dreaming of starting a small residential cleaning service or building a multi-million-dollar empire like Queen Bee Cleaning Services, the journey begins with a single step. Take the knowledge and insights gained from this guide and start your journey to entrepreneurial success in the cleaning industry today.

What's stopping you from starting a cleaning business?

Did you know the average recruitment agency makes nearly $174K per recruiter each year?

Whether you want to start a recruiting business or just understand how a recruiting agency can help your company, you’ll be happy you learned from Brianna Rooney.

Brianna Rooney has been running her own recruitment agency for almost 20 years. In fact, she started Techees, which she later sold to a major tech company for seven figures. Her current recruiting venture, TalentPerch, brings in over $240K monthly.

We’ll share how to start a recruitment business, with advice from Brianna on finding clients, finding talent, closing deals, and more.

[su_note note_color="#dbeafc"]Click on any of the links below to learn more about how to start a recruitment agency.

Case Study: TalentPerch

Brianna Rooney has been in the recruitment industry for nearly 20 years.

She started as a recruiter for NextPhase Recruiting in 2005. When Brianna was 24, her stepdad asked, “What does your boss do for you that you can’t do for yourself?” Her answer was, “Nothing.”

So she decided to create a recruitment agency, Techees, in 2009.

[su_quote]I thought about what tools I have and how can I duplicate what I was doing at the recruitment agency. First, I found my business name. I got my LLC. I got a job board. LinkedIn Recruiter wasn’t around then. I got the same exact database.[/su_quote]

Techees was a contingency recruiting business, which means she only got paid when she got someone hired. She wanted more reliable income, so she started TalentPerch, a recruitment process outsourcing (RPO) company, in 2020. She sold Techees for seven figures the next year.

Since then, Talent Perch has grown and combined RPO and contingency strategies to help businesses find engineers ranging from entry level to the executive suite.

Today, the recruitment business makes more than $2.9M annually, but it’s not easy to start a recruitment agency. Brianna told us:

[su_quote]At first, you have to get paid. I made my first commission in my first month, but I didn’t get paid until the third month. You have to just keep pushing forward. You can never stop. Do-ers are the ones that win.[/su_quote]

Check out our interview with her below:

Build Your Recruiting Skills With UpFlip

We seek out highly successful business owners to provide you with the information you need to learn how to start, run, and grow successful businesses. Get an UpFlip membership to learn more from successful business owners like Brianna, and keep reading to learn more about recruitment services.

Types of Recruitment Agencies

Three people in a recruiting team meeting

There are several types of recruitment agencies that handle various aspects of the human resources and recruitment process. A recruitment agency niche is defined by its:

  • Industry: Tech, nursing, and military recruiting are some of the largest recruitment sectors.
  • Position: Agencies might focus on executive, entry-level, or management positions.
  • Services: E.g., staffing, recruiting, temp, temp-to-hire, payroll, and consulting
  • Billing method: E.g., consignment (commission), variable fees, fixed-rate, fees plus cost of paying the employees

We’ll discuss some common types of recruitment agencies next.

Headhunting Agency

A headhunter works for the client to help them find people who meet the criteria of the job opening. This type of business will normally be paid a 20-30% contingency based on the first year salary after the candidate is placed in the position.

Staffing Agency

A staffing agency handles the entire recruitment process (except potentially interviews, hiring, and payroll). They will normally charge a premium based on the candidate's salary.

There are both general and specialized staffing agencies. The positions normally have a set contract time, but they might be temp-to-hire. Brianna told us:

[su_quote]I’m not a staffing firm. A staffing firm is the owner of the contract. They charge hourly plus a markup. It’s a lot more work than a recruitment agency.[/su_quote]

Talent Agency

A talent agency focuses on recruiting professionals and finding jobs.

The difference between these and other recruiters is that they represent the talent, not the eventual employee. Therefore, their goal is to help their talents find the best employer possible.

Startup Recruiter

This niche of the recruitment business focuses on helping new companies define their needs and find the right talent. Recruiters in this niche may need to understand unique areas of human resources, like stock compensation.

This business model may be more risky but could have higher rewards. Given the salary might be mostly stock options, your recruitment business can request some or all of your pay in stock options as well.

While this is a gamble, a successful recruitment agency could see a windfall if they get options in a company that becomes worth billions.

Executive Recruitment Business

Recruitment agencies with a large network of high-net-worth individuals may want to start an executive recruitment business. This business model can have much longer recruitment processes, but the placement fees are normally much larger.

Contingency Business

Recruitment agencies using this method only get paid when you fill a position. This can be an easy way to start your own recruitment business, but you’ll have to hustle to earn your commissions, and sometimes you’ll put in a lot of work but not be paid.

Recruiting Process Outsourcing Business (RPO)

These types of recruitment agencies get paid for the services they manage. They are more like a business partner who takes over the recruiting process for their clients. It is more regular pay than contingency businesses but may not be as lucrative per position placed.

Diversity Hiring

The human resource industry has focused on diversity hiring for quite some time. Many talent acquisition specialists will need to help companies find potential candidates that help them reach their equal opportunity goals.

Make sure to research laws before offering these services because it is illegal to discriminate based on race or gender, and looking for a candidate from a specific protected category could open up both your recruitment business and your clients to lawsuits.

How to Become a Recruiter

According to Indeed, there are no definite requirements to start recruiting, but many employers require a bachelor's degree. It is also helpful to have human resources experience and work history before you start a recruitment agency, but it is not required.

The main thing you’ll need to become a recruiter is a large network of people who you can refer to clients. Brianna told us:

[su_quote]Your value is based on your candidates. If you have really good candidates, you’ll get the clients. I spent three days, and I pulled all the candidates I could. I worried about analyzing them later.[/su_quote]

For those of you who find her quote contradictory, it’s much easier to find someone who meets the job requirements when you have a huge database than if you are trying to find them once you have a role to fill.

What Are the Requirements to Open a Recruiting Agency?

Man in a suit jacket and glasses looking up agency requirements on his laptop

According to altLINE by The Southern Bank, there are both federal and state requirements to start a recruitment agency. Make sure to have:

Federal Requirements

State and Local Requirements
Employer Identification Number  Limited Liability Company or Corporation
IRS Form 941: Employer’s Quarterly Federal Tax Return  State Tax ID Number
Form W-4 (Employee Withholding Certificate)  Business Licenses and Certifications
Form I-9 (Employee Eligibility Verification)  Other State, County, or City Requirements
Insurance Requirements  

To start a recruitment agency, you’ll probably want to have the following items as well:

  • Business plan: A business plan helps you stay focused on your objectives. You may also want a sales and marketing plan to help guide your decisions on how to find clients and potential candidates.
  • Tax classification: There are numerous tax classifications, and all have their benefits. Discuss the options with a financial advisor or lawyer.
  • Business bank account: Keep your business and personal income separate with a business bank account.
  • Company website: You’ll need a company website when you start a recruitment agency. It can be as simple as a one-pager.
  • Consulting contract template: You’ll want a contract template to define what your agreement includes, excludes, and how payments are handled. If you offer both consignment and RPO, you’ll need different contracts for each.
  • Invoice template: An invoice is used to bill your clients for your services.
  • Non-disclosure agreement (NDA): You will commonly need an NDA for both companies and potential candidates.

How to Start a Recruiting Business

New recruitment agency owner thinking in his office

To start a recruiting agency…

  1. Create a business plan
  2. Choose a business name
  3. Create a legal structure
  4. Secure funding
  5. Set up a LinkedIn Recruiter profile
  6. Find clients
  7. Create job descriptions
  8. Find talent
  9. Review resumes
  10. Prepare talent for interviews
  11. Negotiate offers

Create a Business Plan

You’ll want to define your business idea and lay out what you’ll do when starting a recruiting agency. At a minimum, you’ll want to:

  • Research the staffing industry: You want to do some market research to understand how much money your new agency can make.
  • Identify your target audience: Identify potential customers about their industry, location, and needs.
  • Define your unique selling proposition: Establish how you will differentiate yourself from competitors.
  • Specify your services: Create a list of services you’ll offer.
  • Create a pricing structure: Decide how you’ll charge for recruitment services and document it.
  • Find recruiting tools: Decide what tools you will use and how much they will cost.
  • Establish funding needs: Create a budget to plan how you’ll spend money.

Brianna told us:

[su_quote]Know why you are doing it. Many people think they will be able to work whenever you want. That’s not true. Yes, you get to work [when and where you want], but you can’t just stop very often.[/su_quote]

She also recommends keeping a diary:

[su_quote]Keep a career and success journal. I have all of these goals in different buckets. I write them all in my diary. I look to have wins in every basket (career, family, physical health, mental health) every 1-3 days.[/su_quote]

Choose a Business Name

[su_quote]Sometimes it is hard to find a business name that has no conflicts with trademarks, socials, and website domains.[/su_quote]

Learn how to come up with a business name.

Create Legal Structures

Whether you’re starting a recruitment company from home or providing staffing agency services, you’ll need to choose a business structure.

Brianna and most business owners agree new businesses should start with an LLC. Then when you meet business goals, you can convert to a corporation if you need to.

You’ll need an employer identification number from the Internal Revenue Service, too.

Secure Funding

While you don’t need a lot of money to start helping people and companies fill roles, you will need some funding when thinking about starting a recruiting company.

At a minimum, you’ll need the funds for:

  1. Business registration
  2. Business license
  3. Website
  4. Recruitment technology
  5. 3+ months of living expenses

Create A LinkedIn Recruitment Profile

One of the key tools for a successful recruitment agency is LinkedIn. Ninety-five percent of recruitment agencies use it, and there is a special service for recruiters. According to Kinsta, six people are hired every minute from LinkedIn recruitment efforts.

Find Clients

Concept of a recruitment agency attracting clients showing wood block figures, one labeled "Agency" with a horseshoe-shaped magnet next to it and others labeled "Client"

Recruitment businesses need clients. Depending on your recruitment agency, your clients may be companies, professionals, or both.

A new recruitment agency can use numerous tools to find potential clients. In addition to LinkedIn, you should also consider using the following for your agency:

  • Content marketing: Creating content to attract new business clients and relevant candidates is a great way to find your target clients.
  • Social media marketing: Sharing your content on social media is a great way to reach your target market.
  • Public relations: Publishing press releases and getting your recruitment agency on TV and podcasts are great marketing strategies.
  • Search engine optimization (SEO): A recruitment agency can benefit from optimizing its website rank highly for popular search terms. Consult an SEO expert and pick relevant keywords to go after.

One of Brianna’s weaknesses with the whole recruitment process was getting referrals. She thought people would refer her just because she placed a candidate, but she explained:

[su_quote]Asking for recommendations was hard for me. I didn’t realize I had to ask for them. … Don’t be afraid to ask for a good review.[/su_quote]

Brianna also shared that you can get government contracts after getting proper certification from SAM.gov.

Create Job Descriptions

Recruitment agencies commonly help their clients construct effective job descriptions. Like other types of marketing, marketing an open position requires understanding the types of keywords job applicants search for. Include them while staying faithful to the job requirements.

Make sure to go beyond describing the job. Help people understand what is different about the company’s culture and why people will enjoy working for it.

Pro Tip: You don’t want to include employer branding in the job description when working on contingency because candidates might try to bypass you.

Find Talent

A sharply dressed woman sitting in a minimalists space using a tablet to run a talent search

You’ll want to find multiple candidates for any position so you have a higher probability of filling the position. To widen your net, some of the places you’ll want to post jobs include:

  • LinkedIn: LinkedIn is one of the best job boards when you are recruiting for executive positions or college students. Only 2% of users don’t have any college education.
  • Job boards: Betterteam has a list of 27 job boards that are useful when starting a recruitment agency. You can also use their site to post on multiple job boards at once.
  • Unemployment offices: Unemployment offices can be a great way of finding available candidates quickly. 
  • Personal connections: You should always share open positions with your network because they might know (or be) an eligible applicant.

Review Resumes

When you start a recruitment agency, you’ll want to review resumes to understand how well the candidates match the job posting.

You’ll want to independently verify their resumes (to the best of your ability). Some people fabricate their job history to look like the best candidate.

For example, if someone’s resume and LinkedIn are completely different, be cautious. If someone claims to have held executive positions with large companies, search for their names on websites and even news articles. As a new recruitment business, sending lousy candidates could harm your reputation.

Prepare Talent for Interviews

A recruiter and a candidate sitting side by side and looking at a laptop as they prep for an interview

It’s not enough for recruiting agencies to find talent. You’ll need to prep them for the interview process. As a new recruitment business, you probably won’t know how each company interviews, but you can train candidates up with general interview tips and mock interviews.

You can also ask candidates who have interviewed with a company about the interview process and document what the interview was like. As you build more information, you’ll learn more about what the company wants, and applicant tracking will help you understand what you need to help the candidate improve.

Negotiate Offers

Helping both the business and the applicant establish realistic targets for an annual salary, benefits, and hiring process is often part of a recruiter’s responsibilities.

You’ll want to research the market for the position the business is looking to fill. Finding a new employee in a low unemployment environment may mean suggesting a high hourly rate and providing add-ons that create added value for an employee.

Meanwhile, job seekers may have unrealistic expectations about how much the industry pays and how valuable their skills are. You’ll have to help them understand the types of positions they qualify for, what skills they lack, and how they can increase their value.

How to Start a Recruitment Agency With No Experience

Brianna Rooney sitting next to a search bar with text that reads "We are hiring"

So you’re considering starting a recruitment agency with no experience? It will be a challenge, but don’t let that stop you if you think you’ll be good at it. You might consider some of these ways of finding potential customers:

  • Offer contingencies: Provide your services as a commission based on results instead of a flat fee up front. This will help you get clients when you start.
  • Cold calling: You can reach out to businesses and offer to help them fill the roles they have listed. A business owner might be cautious of this approach, but if you offer a contingency pricing model, you can remove much of the hesitation.
  • Freelancing: You can find freelancing jobs for clients and only charge if you place a candidate. As you place people, you’ll get reviews and start building a reputation.
  • Work with a recruiter: Some recruiters pay others for referring clients. This can be a good way to get started and learn the ropes.
  • Work with job seekers: Help job seekers create resumes, find positions, do market research, and prepare for interviews.

How Do Recruitment Agencies Make Money?

When you’re ready to start your own recruitment agency, you’ll want to choose your billing method. Whether you charge contingency or offer full cycle recruiting, some of the most common ways to charge include:

  • Percentage: Many recruiters charge based on a percentage of the first year salary for each job filled. The percentage will vary based on the services and salary level of the position.
  • Fixed fee: This can be a flat success fee, retainer-plus-remaining fee, or piecemeal based on the services needed.
  • Hourly: Some people charge a flat hourly fee, but this is not the most beneficial way to charge because some positions are easy to fill while others are more difficult. The hourly fee model doesn’t always capture the value added from the service.

Recruiting and hiring can be a time- and money-sucking process. The Society of Human Resource Management found that the average cost to hire a new employee is $4,700.

Senior positions cost more to fill, so many companies are willing to pay for a recruitment agency to help find a general manager and up, but not entry-level employees.

Start Your Successful Recruitment Agency

Think you’re ready to start your own recruitment agency? Get started!

If you’re not quite ready, that’s okay. Check out our program with Brianna Rooney to learn how to become a highly successful recruiter. She shares all the information you need to develop your skills and become successful.

What is your experience with recruiting and hiring?

Are you interested in starting a home business? Today, working remotely has become increasingly popular, which provides an abundance of opportunities for aspiring entrepreneurs.

Starting a successful home-based business can be overwhelming for many people just beginning their journeys. Our guide will help simplify the process with the essential steps and advice from small business owners who have already launched their business ventures from their residences.

We focus on helping you by discussing the following topics. Just click on a link to jump right to the home business information that interests you.

[su_note note_color="#dbeafc"]

Get ready to start a small business at home.

Short summary

  • Start a successful home-based business by carefully considering the type of business, creating a comprehensive plan, obtaining necessary permits and licenses, setting up an ergonomic workspace, marketing your venture effectively, and delivering quality products or services.
  • Identify and focus on specialized market segments to help ensure success in any home-based venture. We show you how.
  • Learn from inspiring success stories of individuals who have turned their ideas into thriving home businesses with hard work and the right strategies.

What is a home-based business?

Home-based businesses can be any size as long as the primary office is in the small business owner's home. Small business owners have lots of options to choose from, including:

  • Local service businesses
  • Online and dropshipping businesses
  • Consulting
  • Freelance business ventures

Cristobal Mondragon started Queen Bee Cleaning Services as a home-based cleaning business. Now it makes over $1.5 million annually.

Check out Chris Mondragon's FREE training to kickstart your own cleaning business. You can learn more about his inspiring journey by watching the interview below.

[su_youtube url="https://www.youtube.com/watch?v=YcYIYdqegGA"]

Read on for all the info you need to decide on a profitable home business idea that will work for you based on your skills and interests in combination with the resources available to you.

What are some advantages of a home-based business?

A home enterprise has several advantages over other small business ideas. Some of the best benefits of a home business include:

  1. Flexible schedule
  2. Lower startup costs
  3. Lower overhead costs
  4. Increased productivity
  5. More opportunities
  6. Higher pay
  7. Less risk than renting a space
  8. More room for personal growth
  9. Tax deductions
  10. Great creative outlet
  11. Reduced personal expenses
 Pros Cons
Flexible schedule Self-discipline required
Lower startup costs Paying attention to daily tasks
Lower overhead costs Lack of privacy
Increased productivity Separating work and home life
More opportunities Lack of space
Higher pay Not taken as seriously
Less risk than renting a space Lack of coworkers to collaborate with and learn from
More room for personal growth Feelings of isolation
Tax deductions Procrastinating or overworking
Great creative outlet  
Reduced personal expenses  

What are some disadvantages of a home business?

Concept of entrepreneur sitting at desk feeling confused about starting home business with dizzy stars and little black cloud over head

When starting a small business from home, many business owners struggle with aspects like:

  1. Self-discipline required
  2. Paying attention to daily tasks
  3. Lack of privacy
  4. Separating work and home life
  5. Lack of space
  6. Not taken as seriously
  7. Lack of coworkers to collaborate with and learn from
  8. Feelings of isolation
  9. Procrastinating or overworking

Many small business owners will attend networking groups that help them overcome these common challenges. Start practicing good habits early to give your home-based business idea the best chance of success.

Factors to consider when starting a business at home

Starting a home business can be a huge advantage or disadvantage to a business venture. Ask yourself the following questions before starting your own business from home:

  • What type of business suits your skills, interests, and resources?
  • Do you have the space for your new business?
  • Does your neighborhood have rules against certain small businesses?
  • Will your family be supportive if you start a small business at home?

UpFlip Cautionary Tale

Many local business owners will find that their neighborhood has rules about running small businesses from home. I have lived in neighborhoods that don’t allow local service trucks, ones that won’t allow any small businesses, and ones that will only allow online businesses.

Make sure you understand the rules for your area before you start a service-based business from home.

How to start a home business

Successful home business ideas will normally follow a nine-step process for the best odds of success.

  1. Decide on a home business idea
  2. Write a home-based business plan
  3. Name your home-based business
  4. Get an LLC for your at-home business
  5. Get business licenses for your home business
  6. Get a home business bank account
  7. Set up your home office
  8. Market your home-based business
  9. Serve your customers

Keep reading to find some of the best home business ideas.

Decide on a home business idea

The first step in starting a home-based company is choosing a business idea. The best small business ideas from home normally fall into the following categories:

  • Online Business Ideas
  • Service Business Ideas
  • Professional Services

We’ll provide you with some home business ideas for each of the three categories next.

Online business ideas

Concept of young man business owner with new idea illustrated by a bright lightbulb over shoulder and laptop in hand

Many successful business owners choose to start an online small business. These make a great new business from home because they don’t require a lot of space and can be started with just the internet and a computer. Consider options like a:

Dropshipping business

This business idea requires creating an online store, finding dropshipping suppliers, and marketing their products. Learn more about dropshipping.

Affiliate marketing business
Woman entrepreneur with megaphone in one hand, cash in the other, and social media icons including Facebook, Instagram, and YouTube drawn around her

Small business owners can make a great living through affiliate marketing. You’ll need a marketing and sales plan because you’ll be paid on commission for selling other companies' products.

Social media business

A social media manager uses digital marketing skills to help other businesses with marketing on social media. Make sure you don’t forget to build your own social media presence, too. Check out our interview with a successful social media manager.

[su_youtube url="https://www.youtube.com/watch?v=kb1czTEK8f8"]
Online store

Whether you have a subscription box business or a dropshipping business, you’ll need an online store. You could even buy an existing eCommerce business.

Check out more online business ideas.

Service business ideas

Check out some of the most popular service businesses that many small business owners run from home.

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Car detailing business

Start a small business at home in the car detailing industry. You’ll be washing cars all day. This profitable business can make a ton of money.

Find out how Alan Tursunbaev turned an idea for a summer into a small business that brings in $50K per month.

[su_youtube url="https://www.youtube.com/watch?v=3jIWyxNjtpU"]
House cleaning service

You can make a great living when you start a small business that’s a house cleaning service. Just ask Chris Mondragon, who started Queen Bee Cleaning, which makes nearly $2 million per year.

[su_youtube url="https://www.youtube.com/watch?v=d4Iip7BHXwg"]
Dog grooming business

There are lots of businesses involving animals. You could start a pet-sitting business, a dog-walking business, or even a mobile grooming business.

Professional services

You can start a professional services small business at home. Consider one of the businesses below.

Renting commercial real estate

Real estate agents can make a great living and work from their own homes. Check out how Thach Nguyen has built a $100M real estate empire.

[su_youtube url="https://www.youtube.com/watch?v=TWCzwn3R78A"]
Consulting business

Whether someone needs a freelance writer, help with social media, inventory management, or financial projections, consulting is a great business.

Learn more about consulting businesses.

Perform market research

Once you have identified the best home business idea, it’s time to research how to make your small business idea work in more detail. This could involve conducting:

  • Target market research
  • Competitive analysis
  • Research on barriers to entry
  • Opportunities research

Once you’ve selected a small business idea, you should write a business plan.

Write a home-based business plan

UpFlip’s How to Write a Business Plan blog loaded on a tablet

Did you know a well-written business plan can help a company grow 30% faster than one with no business plan?

A detailed business plan is essential to any home-based venture's success. It functions as a roadmap. Plus, the business plan details your goals, strategies, and financial outlook.

Check out our blog about business plans to download a business plan template and learn how to write your business plan.

Name your home-based business

Next, you’ll want to name your home-based business. Your business name is the foundation of your brand identity and will inspire your logo, marketing, and customer service.

Your unique business name should be easy enough to remember yet reflective of the values held by you and the company. Try our business name generator. You can find a small business name you love and check the availability on Name Cheap.

Get an LLC for your at-home business

Home business owner wearing Apple watch sitting at sunlit desk reading UpFlip’s Types of Business Structures blog on a laptop

Setting up a limited liability company (LLC) for your home-based business is an essential step in safeguarding yourself and preserving your individual assets.

An LLC provides its owners with restricted liabilities, meaning you won't be personally liable for any debts or duties of your organization. They're easy to create and manage and offer tax benefits for successful businesses.

Establishing an LLC for your at-home business requires registering with the Secretary of State.

By forming this type of legal entity, you protect both your small business and your personal assets. You might also consider a different legal structure like a sole proprietorship or a corporation.

Get business licenses for your home business

When starting a home-based business, it's vital to acquire the essential licenses and permits. Depending on where you're located and what kind of business you're running, there will be various requirements for

  • licenses such as general enterprise approvals
  • sales tax documentation
  • professional credentials
  • any local requirements

Check local and state laws for any rules that might apply to your business. You may receive harsh penalties if you do not follow them. Make sure to keep track of your records and renewal periods, too.

All this needs to be done so that your company remains legit during its operations. Complying with legal requirements helps you avoid issues. Just ask Cristobal Mondragon:

https://www.youtube.com/shorts/keieMgRWF9A?feature=share

Get a home business bank account

For any home-based business, it is essential to open a bank account to separate business finances and personal ones. This simplifies tracking profits and expenses for bookkeeping purposes like tax filing.

To establish such an account, you’ll need your legal paperwork like your LLC registration, Tax ID, business licenses, and EIN (Employer Identification Number).

A dedicated credit card may be beneficial so that you can cover costs while your business builds credit history. All these play into managing your business finances. The better you manage the finances, the easier it will be to identify opportunities for improvement.

Set up your home office

Happy man working at home behind a minimalist desk with laptop, tablet, and notebook and cell phone in hand

A dedicated home office is essential for managing your work and keeping up efficiency. Designate an area that provides privacy and limits disturbances so you can focus on running the business from your house. Comfort should be of utmost importance. Get an ergonomic chair and make sure the lighting facilitates whatever type of work you’ll be doing.

You’ll also want reliable, high-speed internet and software that will help you manage your business. The software you need will vary depending on the type of company you’re starting. Check out our HR blog for human resource provider reviews. Other software we suggest is:

Market your home-based business

You need an effective marketing strategy to launch and grow a home-based business. It's essential to have insight into your target audience and research the competitive landscape. Reach potential customers on social media platforms, websites, or by partnering with related service providers.

Track and measure your promotional efforts using key performance indicators (KPIs) like web traffic or customer inquiries to decide where to allocate advertising dollars. Google Analytics is the tool most small businesses use to monitor their success at getting people to their websites.

Most importantly, marketing is a long-term game plan that requires consistency and dedication. Be patient and you'll stand out from other home-based business owners.

Serve your customers

Woman home business owner meeting with clients in her dedicated office space

Successful home-based businesses rely on providing their customers with stellar service. Depending on the type of business you start, this could be anything from offering personalized attention to delivering high-quality products. Practice operating on the old adage “Under-promise and over-deliver.”

Every happy customer will help build strong relationships that lead to loyalty and often positive word-of-mouth referrals. These can help you grow your at-home venture even faster.

Home business FAQs

What business can I start in my home?

Most businesses can be started from home as long as there are no homeowner association rules or local government prohibitions. You probably won’t be able to start home-based manufacturing or energy companies, for example.

How do I start a small home-based business?

Concept of woman feeling confused about starting a home business shown with laptop, coffee, miniature house model, and question mark speech bubble

Beginning a small, home-based business can be achieved by following the essential steps we’ve outlined. First, consider potential ideas and determine if they are suitable for working from your residence.

Consider profitability by creating an organized blueprint of how to move forward. Pick out the right company configuration, give it an apt name, register it with your state authority, and attain an applicable tax ID number and licenses to pave the way for a successful at-home venture.

Can a tenant run a business from a rental property?

You may be able to start a home business if you rent. You’ll need to:

  1. Check your CC&Rs or lease.
  2. Talk with your apartment complex manager, HOA, or landlord.
  3. Research zoning laws.
  4. Check for other laws prohibiting home businesses.
  5. Get a landlord permission letter for home business activity.

You may need a signed letter of authorization (see our sample) giving permission to use the property for business purposes.

What are the three general rules for qualifying your home office as a business expense?

Smartly dressed woman entrepreneur gesturing to screenshot of IRS home office requirements webpage

According to the Internal Revenue Service, you have to meet three main criteria to claim a home office as a business expense:

  1. Exclusive and regular use: Your home office must be used exclusively for business purposes on a regular basis. It should not be used for personal activities.
  2. Principal place of business: Your home office should be the primary location where you conduct substantial administrative or management activities for your business.
  3. Meeting clients or customers: You must use your home office to meet your clients, customers, or patients, or the office space must be a separate area used exclusively for business purposes.

As long as your home office is exclusively used for work and is where you consistently do admin work, you will normally qualify to deduct 100% of direct business costs and a percentage of indirect but relevant household costs.

What percentage of utilities can I deduct for home business?

According to the Internal Revenue Service, you can deduct utilities using two methods:

  1. Simplified Method: Up to 300 square feet at $5 per square foot for a total of $1,500.
  2. Actual Expenses: This method allows you to use the same percentage of the home you actually use for business. Keep reading to find out how to calculate it.

Using actual expenses, you can either use the percentage based on square feet that are used exclusively for your business, or, if the rooms in your home are approximately equal in size, you can use the percentage of rooms used.

For instance, my office is approximately 15x15 feet or 225 feet out of 1,600 square feet in my home, which equals 14%. I can’t use the rooms method because they are not approximately equal. That calculation would suggest my office space is 33% of the home, which is not a fair representation.

My utilities are around $12,000 per year, which means I can claim 14% of that or $1,687.50 of my utilities. Given my mortgage is $1,700 monthly, 14% of my annual mortgage is $2,856, making my total home office claim $4,543.50—a far better deduction than the Simplified Method’s $1,500.

What insurance do I need to run a business from home?

Insurance agent holding up clipboard with liability insurance form

A home business will normally want a business owner policy (BOP) that bundles together three important coverage types:

  1. General liability insurance
  2. Commercial property insurance
  3. Business interruption insurance

It's typically cheaper to buy a BOP compared to buying each policy separately and you can add additional coverage types as needed. Simply Business is a great place to get your business insurance because it compares rates from 16 major insurers.

Balancing work and life at home

While running a home-based business provides advantages, work-life balance may be compromised. You’ll want to create good rules for yourself to balance your personal time and work time. Here are some rules people suggest (and I wish I followed):

  1. Create a schedule for yourself with regular breaks and start-stop times. This helps keep your work from infringing upon personal time. My wife wishes I’d listen to this one.
  2. Maintain a separate space for your work so you can avoid being in it during personal time. This one is the easiest to follow.
  3. Schedule personal activities including exercise, hobbies, and dates. I try to do this one, but only exercise works flawlessly. My dog and I go for a mile walk every morning.
  4. Send your kids to boarding school if they start plying in your home office (jk).

Expanding and scaling your successful business

Small town concept with wooden block houses, upward-trending arrows, and Scrabble letters spelling out "success"

Once you start a small business at home, you’ll operate the business. As you build success, your business entity will likely need to hire more people, automate systems, or diversify income streams. Careful planning and research are essential for a successful business idea to grow. Some of the best ways to scale a business include:

  • Introduce new services and products.
  • Add another market segment.
  • Explore partnerships.
  • Upgrade technology.
  • Add staff members. (This might mean you need to change the legal structure or move the business out of your own home.)
  • Add new locations.
  • Create a franchise.
  • Increase the budget for your marketing and sales plans.

Ready to start your own business?

Now you know how to choose a business idea, create a business entity and legal structure, and some of the unique features of a home business. It’s up to you to take the time to create a solid business plan, build your business model, and market your business.

What business will you start from home?


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