I'm not always comfortable entering people's homes, but I like cleaning. It gives me a sense of accomplishment. So, I think I'd prefer to start a commercial cleaning business. How do I get commercial cleaning contracts? Good news! Many of our partner Chris Mondragon's strategies are great for companies wondering how to get cleaning contracts.  Chris doesn't ask customers to sign contracts, but he's mastered the concepts of booking ongoing work on Airbnb properties and has made over $1.5 million with Queen Bee Cleaning Service in one year. [su_note note_color="#dbeafc"] In this post, we're going to explore commercial cleaning contracts and learn from Chris’s success. You’ll learn:

• What is a Commercial Cleaning Business?
• What is a Commercial Cleaning Contract?
• How to Get A Commercial Cleaning Contract
  • Step #1. Determine Your Target Customer
  • Step #2. Market Your Cleaning Business
  • Step #3. Make Quoting, Booking, and Paying Easy
  • Step #4. Find Clients
  • Step #5. Provide a Great Cleaning
  • Step #6. Verify Satisfaction
  • Step #7. Renew the Contract
• Frequently Asked Questions[/su_note]

Click any of the links above to jump ahead to that section. IMPORTANT: You'll also learn all the exciting details about Chris’s new course, The 7- Figure Cleaning Business Blueprint. This groundbreaking course is the best way for you to learn the “insider secrets” to ensure an ongoing stream of cleaning contracts from high-quality customers.

What is a Commercial Cleaning Business?

A commercial cleaning business is a small business that offers:

• Office cleaning services contracts
• Janitorial cleaning contracts
• Cleaning contracts for small business owners
• Airbnb or apartment cleaning for property managers

Chris told us: [su_quote]When I first started, I made $44K in the first 3 months.[/su_quote] Check out our first interview with him below. [su_youtube url="https://www.youtube.com/watch?v=d4Iip7BHXwg"] While companies do not have to implement janitorial service contracts, many local business owners prefer cleaning business contracts because they define client expectations, cleaning duties, cleaning supplies, and payment schedules. When we polled our YouTube community, 57% of the 2300 responders said they always require a service contract before starting work.

What is a Commercial Cleaning Contract?

A commercial cleaning contract is a legal document outlining the obligations of the cleaning company and the prospective customer. These may also be referred to as the terms and conditions of the agreement. New customers should sign the contract before any work is done. You should include your signature in the template and simply add the date before sending the business cleaning contracts to prospective customers. The contract should include the following aspects:

• Parties information: Names, addresses, and contact information for both parties.
• Cleaning services: Description of provided services. Remember to include:
  • Number of staff
  • Inclusions
  • Exclusions
  • Time on-premise
• Duration: Length of time the contract cleaning business contract is valid.
• Payment terms: When and how payment(s) should be made, discounts for early payment, and consequences for late payment.
• Violation of contract: Consequences of failing to meet the terms of the agreement outlined in the office cleaning contract. Potential terms (arbitration, interest liens, and more).

You'll need a lawyer to draft the office cleaning service contract template to ensure it's legally binding. Still, I suggest you dive deeply into cleaning company contracts for a minute and add Alliant's Insurance Requirements in Contracts: A Procedure Manual to your reading list.

Brandon's summary of the recommended reading

If you’re not up for reading the above link, we’ll give you a quick overview: You should have at least twice the standard $1 million per incident and $2 million for lifetime general liability. Big businesses may expect commercial cleaning contractors to have other types of insurance too. Check out Tuft's vendor requirements for an example of requirements you might encounter.

How to Get A Commercial Cleaning Contract

To get contracts and secure your cleaning business’s cash flow, you’ll need to follow these steps:

1. Identify Your Target Market
2. Market Your Cleaning Business
3. Make Quoting, Booking, and Paying Easy
4. Find Clients
5. Provide a Consistent Cleaning Service
6. Verify You Satisfied Customers’ Expectations
7. Renew the Contracts

Chris suggests starting with residential cleaning first. Here’s why: [su_quote]Most commercial cleaning customers have Net-30 or Net-45 billing terms (which means from the time they receive the invoice they have 30-45 days to pay). When you first start, I suggest starting with residential.  Commercial have accounts receivable and accounts payable, and it takes time to get paid. Meanwhile, you have to pay bills and pay employees. Just start with residential and then work up to commercial.[/su_quote] Hear other cleaning services tips in our podcast about cleaning contracts.

Step #1. Determine Your Target Customer

You'll need to decide what type of cleaning services you'll offer. This will mean choosing what facilities to work with, where your clients are located, creating a cleaning service price list, and preparing a commercial contract template. 

Facility Type

You'll need to decide what kind of commercial businesses you want to provide services to. We've broken the bidding process into seven categories:

1. Commercial cleaning contracts
2. Office cleaning contracts
3. Bank cleaning contracts
4. Airbnb cleaning contracts
5. Government cleaning contracts
6. Construction cleaning contracts
7. Apartment cleaning contracts

Chris told us: [su_quote]I mostly do residential but I also clean Airbnbs and also offer some contract office cleaning.[/su_quote] If you already have your commercial cleaning business running like a fine-tuned machine, feel free to jump ahead to the various business types.

Location

You'll want to narrow down your locations for contracting cleaning services. When you first start a commercial cleaning service, you might not have any employees and will need to secure cleaning contracts that aren't too far from each other. Most cleaning business owners suggest staying within a 30-minute driving radius so you can handle more clients per day.

Create a Cleaning Services Price Guide

Create a price list you can hand to a potential janitorial service contract customer. Doing so makes you look professional and makes estimating how much to charge them easier.  Chris shared his office cleaning business estimating process: [su_note note_color="#dbeafc"]

1. Go to the site in person. Measure the square footage with a laser.
2. Count stairs, cubicles, bathrooms.
3. Calculate the total number of square feet, then assume a rate of cleaning 2500-3500 square feet per hour. 
4. Calculate hours to clean. Round up.
5. Multiply by hourly rate. 
6. Include 3+ cleanings/week times 4 weeks. Make that your monthly contract bid.
7. Itemize upsells.

[/su_note] Check out our blog about the Queen Bee Cleaning Service pricing guide for a price list you can use for your own cleaning service.

Prepare a Cleaning Contract Template

You'll want to hire a lawyer to help you draft a template that will hold up in court. No one wants to go to court over breach of contract, but a business owner or property manager may refuse to pay. A contract makes your agreement enforceable. Try LawDepot for an easy service contract in your state. They offer unlimited one-time, ongoing, and fixed-term contracts for a small monthly fee. LEARN MORE: We've partnered with Chris Mondragon to create a 7-Figure Cleaning Business Masterclass. Learn more about it here.

Step #2. Market Your Cleaning Business

You'll need to develop an engaging marketing strategy to interact with potential clients.  Focus on the types of commercial cleaning contracts available in your area. Prepare to research your competition, develop a marketing strategy, and join some trade organizations.  Let's look at how each of these can help you get cleaning contracts.

Research your competition 

Understanding what your competition is doing is imperative to get the best clients for your business. You'll want to look at their websites and social media to establish the following:

1. What services do competitors offer?
2. What is the competitor’s pricing? 
3. What platforms are competitors using for marketing?
4. What are competitors doing well?
5. What are competitors doing poorly? 
6. Are there gaps in the market that you can fill?
7. What kind of colors, font, language, and marketing formats are they using?

You'll use the observations to…

Create a marketing strategy

Your marketing strategy will be focused on five main aspects:

1. What content are you sharing?
2. What formats are you using?
3. What is your call to action?
4. How are you tracking results?
5. How are you using the data?

The following sections will help you answer these questions and develop a few ideas for a marketing strategy.

Create social proof

People like to know that what you're telling them works. How can they possibly trust you if they don't know you? Chris is a big believer in this: [su_quote]There’s nothing like social proof! Get reviews and social proof. Ask friends and family to provide reviews. You need them![/su_quote] There are other ways to share:

• Case studies
• Pictures
• Customer quotes
• Industry news
• Videos 

Any of these can be engaging and tell people what you're doing.

Develop an online presence

Build your online presence. Chris suggests using the following resources to build a digital presence:

• Your website
• Craigslist
• Google local ads
• Social media
• Industry organizations
• Yelp!
• Search Engine Optimization (SEO)
• NextDoor, Porch, and Thumbtack (for highly rated backlinks)

While Chris used Nextdoor, Porch, and Thumbtack for customer referrals when he first started, in our most recent interview, he shared some updated advice: [su_quote]Use them for the banklinks, but to get business online, you need to use Google. All these sites get the customers from Google. You can too![/su_quote]

Consider cold calling

Chris told us when he first got his cleaning business license, he aimed to get one or more contracts per week. He went on to explain: [su_quote]I started cold calling property managers. The good news is you don’t need many property managers. Two or three are good enough to get started.[/su_quote] He even told us how to get their attention. Just call and ask: [su_quote]Hi, would you like to lower your cleaning costs?[/su_quote] It will normally get your foot in the door and lead to some janitorial accounts.

Build a network of business owners

Everywhere you go is a networking opportunity. Here are some of the easiest ways to find cleaning contracts:

• Talk to local businesses where you are a customer.
• Reach out to commercial real estate offices.
• Build relationships with property management companies.
• Talk to apartment complexes.
• Check if there are available contracts for private and public schools. (Governments will normally have incentives for minority, disadvantaged, and women-owned businesses. We'll discuss this more later.)

Other considerations

You might want to consider some of these marketing ideas as well:

• SMS messaging
• Learning closing techniques
• Promoting your sanitizing protocols
• Ads on your local public radio station

Chris says: [su_quote]I've been doing SMS marketing for years now. It has a great ROI and less competition.[/su_quote] Hear more from Chris in our interview below. [su_youtube url="https://youtube.com/watch?v=YcYIYdqegGA"] If you enjoyed it, check out this FREE training by Chris.

Pro Tip: Join a trade organization

Trade associations are a great way to network with other professionals in your industry. They also provide valuable resources and information to help you advance your career. Association of Residential Cleaning Services International (ARCSI) and the Institute of Inspection, Cleaning, and Restoration Certification (IICRC) are professional trade associations in the cleaning field. By joining them, you get:

1. Discounts on certifications
2. The latest information in the cleaning business 
3. A high-quality referral to your website

Christopher Mondragon is a member of both trade groups.

Step #3. Make Quoting, Booking, and Paying Easy

Requesting a quote, finalizing the booking, and paying for cleaning services should be a piece of cake for the customer. Whether clients prefer online, in-person, or over-the-phone service, companies should make it easy for new clients to get a quote, book your service, and pay.

Online

Companies should make it easy to get a quote when customers go online. Queen Bee Cleaning Service offers a great example of how to quote online (see the screenshots below). While this is for residential, you could easily create a similar platform for contract commercial cleaning. While a potential client might prefer this online quote process, Chris told us that most commercial cleaning jobs are better to bid in-person.

In-Person

Focus on the concerns and needs first. Once you understand those, share your price list and do a walk-around with them to establish what services they'll need and what others you can recommend. Chris suggested: [su_quote]Use a laser distance measurer to estimate the square footage, then estimate the cost.[/su_quote] Before you leave, make sure to give the client a personalized quote. Using an iPad during the walk-through adds a level of professionalism and transparency because the customer can easily see what you're doing.

Over the Phone

Chris suggests having your phone service available from 7 a.m. to 11 p.m. He told us: [su_quote]Two of the differentiating factors in my cleaning business are the online booking system where customers can book without talking to anyone and my phone service being available longer than most cleaning companies. This makes it easier for customers to book us.[/su_quote] You might want to hire a call center to assist you with answering the calls. Chris recommends outsourcing it to an overseas company to reduce your costs. 

Use Subscription Models

Most businesses have more to do than they have people to do it. Make working with your company as easy as possible by providing a subscription payment model and using open-ended contracts.  Chris told us: [su_quote]Commercial buildings normally need cleaning three to seven times per week.[/su_quote] If your cleaning company offers these terms, it can make both your life and the customers' lives easier. Benefits of these models include:

• Customer knows when their property will be cleaned
• Customer saves through discounts on long term contracts
• Customer submits payment information just one time
• You get paid like clockwork
• Less sales fluctuation
• Better budgeting for both parties

Step #4. Find Clients

Your marketing initiatives should result in plenty of leads for potential janitorial contracts. Once you find the leads, it's extremely important to close the deal and book commercial cleaning jobs. Let's discuss a few things you'll want to have prepared before you start booking business clients.

Don't forget the low-hanging fruit!

People sometimes think that the lowest-hanging fruit isn't worth going for because everyone is fighting for it. But let's be real here––sometimes people think you need an elusive, complicated answer so they avoid the obvious ones like searching these terms:

• Cleaning contracts near me
• Commercial cleaning jobs near me
• Local government cleaning contracts
• Cleaning opportunities for disadvantaged businesses

Worst Case: You waste a couple of minutes and find nothing. Best Case: You find opportunities that change your life!  Check out 21 ways to get cleaning clients for more great info.

Find out WHY they need a new cleaning service

There is a saying I really love: Change happens when the pain of staying the same is greater than the pain of change. – Tony Robbins Office managers, real estate agents, and other people who need janitorial services aren't likely to look for a new office cleaning company unless they have an issue with their current one. You need to know what that issue is so you can keep from repeating it.

Have your license and proof of insurance

Make it really easy for the ideal customer to verify you meet the requirements for cleaning accounts. Each company you bid for may have different requirements for vendors and contractors.  Be open to increasing the level of coverage if the company requires higher insurance. It normally doesn't cost that much more, and the cost should be included in the price of the customer's quote. Simply Business is one of the easiest ways to get the insurance you need for cleaning businesses.

Offer a price list

Hand potential clients a price list while you are touring the customer's property. That way, while you are asking questions and creating an estimate, they are formulating an estimate as well.

Give potential clients a detailed bid

Create line items with as many details as possible. You'll want to include: [su_note note_color="#dbeafc"]

• Each task you'll do
• Quantity of each task
• Price per task
• Cumulative price of each task
• Taxes
• Total cost
• Exclusions
• Available add-ons 
• New customer discount
• Discount for long term contracts
• Date the offer expires

[/su_note] Make sure not to offer a lower cost on your new customer discount than you would want to provide for the entire service relationship. Potential clients will often want to negotiate, and that will be an easy way for them to establish a negotiation tactic.

Step #5. Provide a Great Cleaning

Once you have booked the job, make sure to fulfill your end of the business agreement. Customers of commercial cleaning contracts will often offer more opportunities when you provide excellent office cleaning services. Be ready to do your best job each time. Make sure to bring a janitorial checklist including all tasks required for the job. Have your cleaners check off each task to verify the service provided matches the game plan. This helps ensure the job is done according to the terms of the agreement. If you take pictures of every room before and after you clean it, you can help verify the completion of the job, protect against potential liability claims, and have social proof for other customers. Make sure to ask permission before sharing any images. Check in with a representative of the company when you first arrive on-site and as you are leaving. Many jobs may require badges and egress through security checkpoints. This is especially common in hospitals, government offices, and companies like banks and casinos that hold a lot of money on-site. You'll also want to let the security or company representative know you are leaving so they can make sure the office space is secure after your business leaves.

Step #6. Verify Satisfaction

The key to keeping customers happy is verifying your business met or exceeded their expectations. Chris told us: [su_quote]I'll reach out to customers the next day to verify they were happy with our services. If they have any concerns, I try to address them immediately.[/su_quote] While you might not want to do this every time you clean for small businesses, you probably want to do it after the first time and then every couple of times until you know that the new business is happy with your services. Then you can move to a monthly or quarterly check-in as you go along.

Step #7. Renew the Contract

If you are doing a trial period or fixed-term cleaning contracts, you'll want to reach out to the client to renew the contract. You'll probably want to reach out 30 days before the end of the contract, then once a week until you have confirmation of how to proceed. You'll also want to follow a similar procedure if you are increasing your prices or there is a major shift in the market that suggests people may be tight on money and unable to pay. At this point, you are done with the process of finding commercial cleaning jobs for your own cleaning business. The following sections will have some new information, but they are category-specific based on how to get cleaning contracts with specific types of businesses.

Frequently Asked Questions

Get the answers you're dying to know here!

How to Get Commercial Cleaning Contracts

Getting commercial cleaning contracts is a seven-step process:

1. Determine your target customer's location, business size, and the services you'll provide to them.
2. Market your business digitally, with print, and through audio sources.
3. Make estimating, booking, and paying for cleaning services simple.
4. Provide potential clients with the information they need to make an educated choice and book the job.
5. Provide clients with great service.
6. Routinely verify the client is happy with your cleaning job.
7. Renew contracts when they expire.

Read this article thoroughly for more details on each of these steps.

How to Get Cleaning Contracts with Banks

If you want to clean banks, be prepared to take some extra precautions. You'll probably need to have:

• FBI Background Checks on everyone who will work in the bank
• Insurance policies that cover the amount in the vault
• Cybersecurity insurance

Other than stricter requirements, you'll be doing the same thing as with any other office building. Jump to step two in the blog to learn more about how to build your business once you’ve designated your target market as banks.

How to Get Airbnb Cleaning Contracts

Airbnb cleaning contracts are similar to residential cleaning, but there will be a couple of extra considerations. You'll need to:

1. Change out towels and bedsheets
2. Bring replacement/refill toiletries
3. Wash laundry or partner with a laundry service

The best ways for Airbnb cleaners to get work are Turno, host groups on social media, and Turnify. Chris says: [su_quote]Airbnb can have much higher profit margins if you get the service right. I like using AirDNA to get an estimate of their revenue so I can price the service right.[/su_quote]

How to Get Office Cleaning Contracts

This easy six-step process shows how to get cleaning contracts with offices:

1. Market your business digitally, with print, and through audio sources.
2. Make estimating, booking, and paying for cleaning services simple.
3. Provide potential clients with the information they need to make an educated choice and book the job.
4. Provide them with great service.
5. Routinely verify the client is happy with your cleaning job.
6. Renew contracts when they expire.

Jump to step two in the blog since you already know who you'll be targeting.

How to Get Government Cleaning Contracts

If you'd like to know how to get cleaning contracts with the government, start by considering your circumstances. The government has a lot of programs that make it easier for smaller companies to get contracts.

• You have an advantage if you meet the following requirements:
  • Stay under $7.5 million in annual revenue
  • Acquire proper licensing
  • Meet insurance requirements for each job
• Register for different government sites:
  • Register with SAM.gov (required for all federal jobs)
  • List any products you sell on GSA.gov
  • Register with Subnet
  • Download the list of prime contractors from SBA and start cold calling
  • Sign up for the Forecast of Contracting Opportunities Tool
  • Research your local and state government offices’ contracting programs
• Subscribe for updates on projects that meet your business goals.
• Submit proposals within the timeline specified.
• Adhere to government rules.

You'll probably need to build a reputation before you go for these contracts, so I'd add this to your long-term goals. 

How to Get Cleaning Contracts with Builders

If you want to work related to construction cleanup, you'll need to build relationships with them. You can do this in a few ways. Here are some of the best:

• Register entity with SAM.gov (required for all federal jobs):
• Register with Subnet
• Download the list of prime contractors from SBA and start cold calling.
• Sign up for the Forecast of Contracting Opportunities Tool
• Go to contractor networking events:
  • Association of General Contractors
  • Associated Builders and Contractors
  • American Subcontractors Association
• Hire a freelance virtual assistant to pull a list of new construction companies and reach out to them. (You can do this yourself, but it's time-consuming.)
• Use the steps detailed at the beginning of this blog to market to contractors.

How to Get Cleaning Contracts with Apartments

If you are wondering how to get cleaning contracts with apartments, you'll want to take a slightly different approach:

1. Establish the size of the property.
2. Provide estimates for the different apartment sizes.
3. Offer them a discount based on the total number of properties cleaned.

Example: These are actual prices from Chris's move-in/move-out pricing sheet: You could offer a 5% discount for the first 10 apartments, a 10% discount for the next 11 to 50 apartments cleaned, a 15% discount for 51 to 100, and 20% for every apartment after.

Can I Buy a Cleaning Contract?

Yes. You can buy cleaning contracts. Chris told us that the best place to buy a cleaning contract is Craigslist. Just search “Cleaning” and you’ll normally find some contracts to buy. You can also buy into cleaning franchises as another way of buying cleaning contracts.

Discover How to Get a Never-Ending Stream of Cleaning Contracts in “The 7-Figure Cleaning Business Blueprint”

While I've shared many helpful tips, if you really want to learn Christopher Mondragon's “insider secrets” for always having an ongoing stream of cleaning contracts, this life-changing course is a must-have. Inside the course, Chris shares his innovative strategies for obtaining high-ticket cleaning contracts, which earned his business $4.5M in record time. Click here to learn all the exciting details.

Start Cleaning Commercial Properties

We've given you a lot of information to start providing cleaning contracts to other businesses. If it sounds intimidating to start your own business, there are opportunities to buy a business. If you haven't already, check out our other cleaning company articles. What part of the commercial cleaning business interests you most?

Have you ever wondered how to start a construction company but hesitated because you don’t have business experience or a previous business failed?

Marc Rousso knows what it’s like. His real estate business failed during the 2009 recession and left him owing the bank $2.5 million after liquidating everything. But within seven years, he grew JayMarc Homes into a construction company that makes $80 million annually, and he’s already paid off all the debt from his prior business.

We combine his insight with industry research to share everything you need to know to get into contracting (even if you have no money to invest).

How to start a construction company

We’ll cover each of the following topics. Read from start to finish or click any link to jump to the step you need help navigating right now.

1. Learn about the construction industry.
2. Decide how to start your own construction company.
3. Write a construction company business plan.
4. Choose a construction company name.
5. Learn how to open a construction company.
6. Set up your construction business finances.
7. Establish safety protocols.
8. Get equipment and supplies.
9. Hire employees.
10. Consider how to grow a construction business.
11. Document your own business processes.

Step 1. Learn about the construction industry

• How much do construction companies make? According to IBISWorld Report 23, the average company makes around $696K in revenue, but JayMarc Homes makes approximately $80 million per year.
• How much do construction company owners make? The profit margin for construction work is 3.4% before taxes, which means that the average small business owner makes approximately $23,664 in profit plus any salary they take from contracting.
• How many construction companies are in the U.S.? There are over 3.8 million construction companies in the United States, with an average of 2.63 employees.
• What is the most profitable construction niche? Land developers have the most profitable niche with an average pre-tax margin of 17%, followed by remodeling and excavation at 7.2%. Check out the table below for other segments' profit margins.
• How to start a construction company with no experience: Starting a construction company with no experience may be a challenge. The average home requires 22 subcontractors to build a house, so you’ll need lots of basic knowledge and soft skills to manage a contracting company without experience.
• How to start a construction company with no money: You can always book jobs and then rent the equipment needed to complete the job. Reinvest the profits into the business to reduce your costs over time.
• How much does it cost to start a construction company? Marc started his contracting business with around $15K. But other construction companies have started with much less. In fact, the VP Homes CEO entered the construction industry with $80 of tools and is now making $1.2 million per year.
• What skills do I need to own a construction business? You must understand building materials, each subcontracting field, and safety requirements. You might also need certifications depending on your niche.

Construction Niche	Pre-Tax Profit Margin
Land Developers	17%
Remodeling	7.20%
Excavation	7.20%
Concrete	7.10%
Swimming Pool Construction	7%
Electricians	6.20%
Apartment & Condo Construction	6.20%
Transmission Line Construction	6.10%
Home Builders	6.00%
HVAC	5.30%
Roofing	5.30%
Road & Highway	5.20%
Heavy Engineering Contractors	3.20%
Plumbing	3.20%
Commercial Builders	3.10%
Industrial	2.80%

Pro Tip: Subscribe to construction industry publications and local industry publications to keep updated on trends in your industry. Check out some of the popular industry organizations.

Case Study: JayMarc Homes

JayMarc Homes focuses on building custom homes. It was their second construction business after a company closure. They currently make about $80 million in revenue annually with a 10% profit margin, but Marc warned:

[su_quote]In any 10 years, you’ll probably have a 5% year, 10% year, 17% year, and 27% year. It all depends on the economy.[/su_quote]

Check out our interview with Marc below:

https://www.youtube.com/watch?v=dCSP8nNbdq8

Next, you'll want to decide how to start a construction company.

Step 2. Decide how to start your own construction company

People who want to start contracting and construction companies have two main options:

• General contracting
• Subcontracting

Find out more about how to start a construction company as each of these types of contractors.

What is a general contractor?

A general contractor is the primary contact between a property owner and the construction project. Their role includes:

• Creating and managing the construction budget
• Hiring, managing, and paying subcontractors
• Working with the architect to implement and revise design specifications
• Maintaining project schedule and timing
• Scheduling inspections
• Making payments to vendors and specialty contractors
• Collecting and tracking lien waivers
• Managing post-construction issues with warranties and payments

How to start a general contracting business

Starting a general contracting business will normally require some or all of the following:

• time in the field
• education in the field
• passing an exam
• background checks
• security bonds

Find your state’s licensing requirements for how to start a small construction business as a general contractor.

What is a subcontractor?

Subcontracting businesses are normally construction services focused on specific trades like HVAC, plumbing, electrical, roofing, carpentry, or other fields with specialized construction equipment or tools. The bigger specialty contractors may also compete as general contractors.

For instance, when I worked at Honeywell, we would compete for both HVAC and general construction work when bidding on government contracts for new federal, state, and local projects.

There are plenty of business ideas in the construction industry to consider. Check out our courses here. The cleaning business, pressure washing, and flooring courses will all guide you toward success in the construction industry.

Once you've decided whether you want to be a general contractor or a subcontractor, you'll want a business plan to guide you through the process of how to start a construction company and succeed.

Step 3. Write a construction company business plan

You’ll need a construction business plan to be successful.

A solid business plan includes:

• Contracting insurance information
• Competitive analysis
• Construction equipment list
• Financial projections
• Location details
• Licenses and permits
• Marketing plan
• Money-making strategies

Pro Tip: Our business plan guide walks you through writing a business plan and includes a free template for getting your business plan in order.

We can't discuss how to start a construction company without discussing choosing a business name…

Step 4. Choose a construction company name

Choosing a name can be exciting! Consider the following tips when choosing a construction business name:

• Add your details: JayMarc Homes communicates what field the business entity is in, though it could also be a real estate business.
• Easy and clear: JayMarc Homes might be changed to JayMark by potential customers. When it comes to getting a website, I would buy both domains, just in case.
• Location: Construction companies can rank higher in search results with a business name that includes the city name.
• Branding: A new construction company will have other branding elements. How will they tie in with your new business name?

Pro Tip: Try out our construction business name generator. Find a name that ensures your business’s future success and click on it to buy the domain.

Next, we’ll discuss how to start a contracting business legally.

Step 5. How to open a construction company

After writing a business plan, you’ll need to establish a legal structure. While some businesses can get away without creating a business entity, it is legally necessary for a local construction company.

Building companies should consult with a business lawyer to make sure they comply with all the laws that govern small construction companies in their area.

Your new construction builder will likely need assorted licenses, permits, insurance, and tax forms. Find out what you’ll need from the Small Business Administration (SBA) and Municode Library.

Business structure for construction companies

Construction companies need to create a separate legal entity to keep company property and personal assets separate. Most construction companies will form one of the following structures through their state’s Secretary of State website:

1. S-Corporation: Best for high-earning companies that want to lower business owner taxes. A limited number of stockholders, provides personal liability protection, requires business owners to receive a salary (and optional dividends), no double taxation.
2. C-Corporation: Best for companies trying to change the world. Unlimited stockholders, provides personal liability protection, high compliance costs, and double taxation. Business owners can earn money through multiple income streams with different tax codes.
3. Limited Liability Company: Best for companies that want to separate business entities from personal assets. Provides limited liability, pass-through income, and no double taxation.

Pro Tip: To learn more about business structures, check out our blog on 11 structure options.

You’ll also want to get your business licensed. Some states let you do it all at once. Don’t forget to grab an employer identification number (sometimes called a federal tax ID) from the IRS. It’s used for payroll and business taxes when starting a contracting business.

What licenses are needed to start a construction business?

A successful construction business will need different business licenses depending on your location and business plan. There are main categories of business licenses for a contractor business: general contractor’s license or subcontractor license. Check with local industry associations and the state and local government for more information.

Next, you'll need to thing about finances as you learn how to start a construction company.

Step 6. Set up your construction business finances

Financial management is an essential part of how to start your own construction business. Once you arrive at this step, you should already know your budget, but let’s look at how to:

• Get a business bank account
• Get small business insurance.
• Secure funding
• Create a pricing structure

Business bank account

To run a successful business, you need to open a business bank account because you need to separate your business and personal finances and assets. Business bank accounts can be either online or from brick-and-mortar (legacy) banks and credit unions.

Online banks tend to have better offers, but they might not have as broad a range of business credit card accounts and service offerings as the legacy banking system. If credit accounts or making cash deposits are important to you, go with the legacy banks. Learn more from our business bank account guide.

Get business insurance

You’ll want to get business insurance, including:

• General liability insurance: Covers against customer injuries
• Property insurance: Protects the business owner from expenses due to property damage
• Workers compensation insurance: Pays employees for lost wages and medical bills when they get hurt
• State disability insurance: Covers against full or partial disability
• Unemployment insurance: Covers former employees who are laid off
• Commercial vehicle insurance: Covers against accidents when driving

Pro Tip: Consider Simply Business to get the most competitive general liability insurance quotes for your business.

Funding

The contracting industry doesn’t cost a lot to get into, but funding is an essential part of starting a successful business. You might consider:

• Small business loans (including SBA loans)
• Equipment loans
• Angel investors
• Business partners
• Credit cards
• Crowdfunding
• Government programs
• Home equity loan
• Friends or family
• Personal finance through savings or wages
• Rollover for business startups (ROBS)

Each method has its pros and cons. For example, SBA loans may be a good way for a new business to get a business loan because they typically have better interest rates than any other business loan. That said, the interest could start accruing before your first building is complete.

A business line of credit only charges interest on the money you use, making it a cost-effective way to fund your own construction company.

Pro Tip: National Business Credit is our preferred business financing partner.

Pricing structure

A construction company will have different ways of pricing. Some of the common ones are:

• Time and materials: You charge based on the time and materials used for the construction project.
• Flat rate: Charge an all-inclusive fee.
• Market value: If you’re designing and building a home, you might sell the property at market value. This can have huge profit margins if you can purchase materials for less than most local companies.

We cant talk about how to start a construction company without reminding you there are lots of safety laws you need to follow

Step 7. Establish safety protocols

Occupational Safety and Health Administration (OSHA) governs workplace safety and has special requirements about how to run a construction company. Supervisors will need the OSHA 30 certification. There are also personal protective equipment requirements for each trade.

Take OSHA requirements seriously to keep all parties safe from injury, fines, and legal action.

You'll need to get equipment because it's a crucial aspect of how to start a construction company.

Step 8. Get equipment and supplies

Construction businesses need lots of equipment and supplies, including:

• Personal Protective Equipment (PPE): Hard hats, safety vests, safety goggles, lockout-tagout equipment, and eye protection
• Project Management Software: You’ll need construction management software like Monday Sales CRM.
• Heavy Machines: You might need excavators, dump trucks, cranes, concrete mixers, and other machinery.
• Hand Tools: You’ll need various tools depending on your specialization, but most construction workers will need at least a hammer and screwdrivers.
• Power Tools: Buy or rent drills, saws, and other power tools to make your construction jobs faster and easier.
• Specialty Equipment: Each field in the construction industry will need different tools. Make sure to research the crucial tools for your industry.

Check out our interview with Avanni Petras to find out how he dealt with the cost of equipment when he started Petras Homes on a shoestring budget.

https://www.youtube.com/watch?v=_PpDwut_2Lw

When you think about how to start a construction company, are you thinking about having employees? If you are check out our next section.

Step 9. Hire employees

Hiring employees in the construction industry is a crucial aspect of how to start a home-building company. We asked Marc how many employees they have and he told us:

[su_quote]We have 45 employees, 30 in the office and 15 out in the field. Almost all our employees are referrals.[/su_quote]

Marc described some of the ways they help make JayMarc Homes a great place to work. He told us:

1. During the first week, we don’t send them out to the field. We help them get to know everyone so they feel like they are part of the family.
2. We have them read the book Exceptional Service, Exceptional Profit. It helps align new employees with quality services and business strategy.
3. Once everyone gets to know the new employees, we get together and tell them positive adjectives that describe them — it builds them up and lets them know how amazing we think they are.
4. Then, we do a naming ceremony where we establish team names.

He also told us

[su_quote]Over 10% of our workforce has left and come back.[/su_quote]

Pro Tips: It helps if the people you hire possess technical skills, but they can be taught. Here’s a great new hire checklist for a contracting business.

[su_quote]We’re a luxury brand. We sell premium customer service and have every model available as a home.[/su_quote]

Step 10. Consider how to grow a construction business

JayMarc Homes holds webinars where they teach people about the aspects of custom home building and home ownership.

[su_quote]Our webinars don’t make us money, but they help us build relationships where people trust us more and come to us when they are ready to build a custom home.[/su_quote]

Marc specifically recommends identifying your niche and mastering it. He told us:

[su_quote]If you don’t master a niche, you’ll have a hard time making a profit. You’ll effectively pay a dumb tax by trying to jump all over the place.[/su_quote]

Market research: Identify your customer

Hopefully, you did some market research about your target market when writing your business plan, but if you didn’t, it’s time for market research now. Small businesses in the construction industry might specialize in specific construction areas like remodeling. In Marc’s case, they have three primary customers they identify:

1. High-end home buyers: The target audience for the homes they build and sell themselves. These will normally be people with 700+ credit scores who can afford a $3 million home.
2. Landowners: Wealthy families who own undeveloped land and need to build their homes. These clients will normally have special features they want in their homes. JayMarc is able to offer them standard models or combine two or more home models.
3. Distraught housing owners: These customers own or rent properties in wealthy neighborhoods. They create great opportunities to make higher profits by demolishing the home and replacing it with a new one in better condition.

[su_quote]We specifically drive the neighborhoods we want to build in and look for homes in the third category. We then build a relationship with them. It helps attract business when we remove an eye sore and replace it with a beautiful new home.[/su_quote]

Read more about identifying ideal customers and creating a customer persona.

Use this information in your own marketing strategy to help you find customers using digital marketing, which we’ll discuss next.

Digital marketing

In the digital age, your online presence is how customers find you. A website, social media accounts, email newsletters, and digital advertising are all practical marketing tools. Check out UpFlip’s helpful guide on creating a website.

Be sure to implement SEO for the best results. Services like Surfer can help you with that. And the best part is you can always perform a quick test to determine if your SEO is working.

Check out what Entrepreneur.com has to say about finding a reputable SEO company. And once you have your website, don’t forget to explore the following opportunities to improve SEO:

Try a digital business card service, like Popl, that allows you to link your contacts, websites, social pages, payment apps, and promotional material all from one page.

Instead of spending too much time scrolling through social media, make it work for your business! Facebook and Instagram provide free insights on business accounts with opportunities to run paid ads.

Managing multiple social media accounts can take a lot of time, and that’s something most small business owners don’t have to spare. Tailwind makes this easier by managing your email and social media marketing across platforms and is an especially useful tool for small businesses that don’t have the budget to hire dedicated marketing staff.

A newsletter is an excellent way to keep in touch with customers and send them coupons. Mailchimp and Constant Contact provide awesome email marketing tools.

Take your ad dollars one step further with broader digital marketing efforts. Consider pay per click (PPC), marketing automation, and other avenues.

Consider creating mailers, brochures, business cards, car magnets, flyers, t-shirts, and other promotional swag as a way of getting your name out there. Use an application like Canva to help.

Cold-calling and door-to-door advertising are less common these days than they were through the mid-’90s, but these methods can still be effective if done responsibly.

Pro Tip: Consider simple uniforms and vehicle branding to look professional and maximize advertising.

Get reviews to feed the crews

In addition, actively seek reviews! You’ll need to ask every customer for reviews. Otherwise, negative reviews will prevail. For bad reviews (warranted or not), respond professionally.

Good feedback leads to new customers and encourages repeat business.

Step 11. Document your own business processes

Construction companies have lots of processes that have to be followed. From getting permits to inspections and proper building techniques, you’ll need to make sure everyone knows what to do.

Good processes scale easily for others to follow. You won’t stop being actively involved completely, but good processes will help you delegate better. Use Lucidchart to document them in a process map.

Here’s a basic “process” for documenting your processes:

1. Set a goal for your process mapping session.
2. Include all roles involved in the workflow.
3. Identify the issue you hope to solve with the map.
4. List all activities.
5. Determine the triggers, inputs, and outputs.
6. Flow out the steps and decisions because you can’t always depend on the “ideal” path.
7. Make the final draft, get all roles to agree, and sign off on the process map.

For instance, the basic home building process includes:

1. Commit to an architectural plan.
2. Clear the land.
3. Get building permits.
4. Arrange for utility and infrastructure (electrical and plumbing) installation.
5. Lay the foundation.
6. Add the framing and roof.
7. Install in-home plumbing and electric.
8. Get inspections.
9. Install fixtures.
10. Get more inspections.
11. Perform construction site cleanup.

Each of these will have subprocesses that need to be performed or managed, too.

Now you know how to start a construction company. It's up to you to do the rest.

Create a successful contracting business

The internet won’t replace the construction industry. Before starting your construction business, ask yourself these two fundamental questions:

• What do I need to research?
• Am I capable of providing a great experience through top-level customer service?

It might seem like a lot, but don’t overcomplicate it. In truth, you can start a construction business quickly.

Provide outstanding service, make money, and satisfy your customers. That’s all you need to succeed. Now you know how to start construction business operations. It's time to go forward and build.

What construction practices would you like to see improved?

Did you know that tech startups normally spend over $300K during their first year of business?

Many people dream of starting a tech company and solving the world’s problems, but few have what it takes. When considering tech startup ideas, you need an understanding of how impactful the idea will be on the world.

We’ll share some of the best tech business ideas for people to start, give you some background on each industry, and share the average revenue, profit margins, and growth rate for the industry. Get ready to learn about profitable tech startups.

By the end of this post, you’ll know about major players in the tech startup space and have the inspiration and details you need to launch your tech business.

[su_note note_color="#dbeafc"]

Click on any of the links below to learn about the tech startup topic that interests you most.

• What are tech startups?
• Best tech startup ideas
• What is a good startup business?
• How to start a tech startup
• How many tech startups fail?
• How many tech startups are created each year?
• How to compare tech business ideas
• What are the most profitable tech startup ideas?
• Which tech startup idea do you like?[/su_note]

What are tech startups?

When they hear “tech startup,” most people think of software companies, SaaS (Software as a Service), and technology like AI and VR. The truth is, though, technology is a very broad concept that touches just about every industry.

So what is a tech startup? In short, it’s any business that aims to provide technology products or services to customers, whether those are end users or other businesses.

This can include what we think of as basic services, like device repair or website design, along with things like biotech, nanotech, robotics, and other advanced or emerging technologies.

Best tech startup ideas

There are countless tech startup ideas, and the best ones often address current problems or needs in the market. Here are some tech startup ideas to consider.

1. AI-powered customer support

• Average Annual Revenue: $35K-$50K
• Average Profit Margins: 10.5%
• Startup Costs: $100-$200
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.9%
• Best for: Outgoing and social entrepreneurs, those with strong scheduling, time management, and problem-solving skills

The expansion of artificial intelligence technology in the past few years has opened up a lot of startup ideas for aspiring entrepreneurs who want to start their own business in tech. A customer support platform is among the most in-demand.

According to a survey from Salesforce, 23% of customer service companies were already using AI in 2023, and that figure is only likely to grow as more people embrace the technology. You can start a very successful tech startup providing these chatbot services to potential customers.

2. eLearning platform

• Average Annual Revenue: $234K+
• Average Profit Margins: 5.8%
• Startup Costs: $100-$1K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.1%
• Best for: People with niche or in-demand skills and expertise

What’s great about starting an online course business is that it’s not just for tech entrepreneurs. If you have basic computer knowledge and skills or expertise that other people want to learn from, you can start a profitable business with an eLearning platform.

The most popular subjects for online courses include web design, graphic design, and business topics like digital marketing, social media management, and how to write business plans.

The truth is, though, you can start an online platform for education on any subject that you’re passionate and knowledgeable about. Jacques Hopkins makes $40,000 a month from Piano in 21 Days, which started from his love of playing piano as a hobby. Hear his story here:

3. Health and wellness apps

• Average Annual Revenue: $130K+
• Average Profit Margins: 5.4%
• Startup Costs: $100K-$3.5M
• Time To Revenue: 6-18 months
• Annual Market Growth Rate: 0.4%
• Best for: Wellness and nutrition professionals, athletes and fitness experts, entrepreneurs who excel at organization, sales, and customer service

Healthcare mobile apps are a rapidly growing industry. This market grew by 14% during 2020, largely fueled by the pandemic, and is expected to reach nearly $150 billion by 2028.

Basically, if you’re looking for a tech business idea that can help potential customers improve their lives while you earn a profit, health apps for mobile devices are an excellent way to go.

Launch the best business startup with a health and wellness app by niching down on a target audience. That’s what James Li did when he started Mighty Health, an app business focused on wellness for people over 50. Hear his story here:

4. Smart home solutions

• Average Annual Revenue: $43M (there are only 836 companies in the industry)
• Average Profit Margins: 18.1%
• Startup Costs: $1M+
• Time To Revenue: 1+ years
• Annual Market Growth Rate: 12.6%
• Best for: Tinkerers, makers, programmers, engineers, automation experts

A smart home technology startup can take a lot of different forms, and that’s one reason this business model is a great way for aspiring entrepreneurs to get into the tech space.

You can create smart devices to automate or simplify just about any household task, from food tech like smart appliances to automatic cleaning solutions or home security solutions.

If you want a cheap, easy tech startup idea, consider a business creating automation routines or skills for existing smart home systems. That’s one of the few approaches to starting a tech company you can get into with $0 startup costs, and it can be a very profitable venture if you appeal to the right target market.

5. Sustainable tech

• Average Annual Revenue: $500M
• Average Profit Margins: 13.25%
• Startup Costs: $100K-$3.5M
• Time To Revenue: 6-18 months
• Annual Market Growth Rate: 18.1%
• Best for: Eco-conscious entrepreneurs, makers, programmers, and engineers passionate about sustainability

Climate change and sustainability have become an increasing concern for consumers in the past few years and people are eager for innovative ideas to reduce their carbon footprint and impact on the environment.

There are lots of tech startup ideas related to sustainability, from new ways to use renewable energy like solar and wind power to developing electric car charging stations and plastic-replacement products.

The bottom line is sustainable tech is an emerging industry poised for rapid growth, and you can make big revenue (and a big impact on the world) with a tech startup company in this space.

6. Telemedicine platform

• Average Annual Revenue: $22M
• Average Profit Margins: 19.37%
• Startup Costs: $500-$250K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 4.6%
• Best for: Healthcare professionals, health and wellness experts, programmers and developers

Telehealth is another emerging industry that’s seen rapid growth in the past few years. It’s expected to be a $460 billion industry by 2030, and North America is the largest market for these healthcare tech solutions.

This is among the top technology business ideas for entrepreneurs in the health and wellness space. As telemedicine adoption expands, providers and patients are eager for ways to use augmented reality, cloud technology, and similar emerging technologies to help people stay healthy.

7. Personal finance management

• Average Annual Revenue: $1.57M
• Average Profit Margins: 18%
• Startup Costs: $500-$5K
• Time To Revenue: 1-3 months (not including time training as a CPA)
• Annual Market Growth Rate: 1.7%
• Best for: CPAs, finance experts, entrepreneurs with strong math skills

Instead of using traditional financial services, an increasing number of people today are looking for tech solutions to their money management.

Financial tech businesses include things like online stock investing platforms, mobile apps for asset and investment management, and banks that operate solely through an online platform.

This is an idea that isn’t just great for folks from the tech industry but also for accountants, bankers, investors, and other financial experts who want to start their own business in the tech industry.

8. Language learning apps

• Average Annual Revenue: $75K-$200K
• Average Profit Margins: 12.4%
• Startup Costs: $100-$200
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.2%
• Best for: People who speak more than one language, global web and software developers

Students aren’t the only ones who need to learn a second language. As remote work and digital nomads become more prevalent, more people have the chance to travel the world—and they need an easy way to communicate with people wherever they go.

A language learning app is one tech startup idea that capitalizes on this trend and can be a very profitable business. Just look at existing language learning tech businesses like Duolingo, which has been growing at a rate of up to 128% year-over-year since 2019.

9. Virtual reality experiences

• Average Annual Revenue: $3,570,588
• Average Profit Margins: 30.36%
• Startup Costs: $500-$5K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 30.36%
• Best for: Gamers and game designers, creative entrepreneurs

The rise of augmented reality and virtual reality technology has opened up exciting new possibilities for entertainment businesses in the tech space.

There are multiple ways to launch a tech startup idea using this business model. You could open a virtual reality arcade, launch an AR/VR app for mobile devices, or develop a gaming system that utilizes virtual or augmented reality technology.

Virtual reality experiences can be profitable in multiple industries, too, not just for entertainment. From telemedicine to communication to retail, there are ample opportunities for a technology startup offering VR and AR experiences to thrive.

10. Blockchain-based solutions

• Average Annual Revenue: Varies based on tokenomics
• Average Profit Margins: 30.36%
• Startup Costs: $500-$5K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 11.30%
• Best for: Data and programming professionals, people with expertise in finance, law, and other professional services

Blockchain is a distributed database technology that uses cryptographic technology to quickly and securely transfer assets with less risk of fraud, theft, or other issues.

Most current tech startups utilizing blockchain are in the financial and legal sectors—think cryptocurrency or a legal tech startup using blockchain for contract management or real estate deals.

There are even social media blockchain solutions like Stars Arena, which makes up to $300K per day at less than a month old. Plus, users of all audience sizes earn funds by selling tickets to their private rooms, referring people, and receiving tips.

The truth is, though, businesses have only scratched the surface of technology ideas using blockchain. There are a variety of profitable tech startup ideas you can explore in this space, from new payment systems for online businesses to intellectual property protection services and customer relationship management platforms.

11. Remote work tools

• Average Annual Revenue: $35K-$50K
• Average Profit Margins: 10.5%
• Startup Costs: $100-$200
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.9%
• Best for: Outgoing and social entrepreneurs, those with strong scheduling, time management, and problem-solving skills

Despite the wave of return-to-office mandates, remote work is here to stay. In 2023, 12.7% of full-time employees worked remotely, while another 28.2% worked under a hybrid business model—and that’s not even counting freelancers and contractors.

What’s more, it’s estimated that 32.6 million Americans will work remotely by 2025. That’s a lot of potential customers for software startup ideas or software as a service (SaaS) products aimed at remote workers.

12. AR-powered shopping

• Average Annual Revenue: $31K+
• Average Profit Margins: 1.9%
• Startup Costs: $100-$1K
• Time To Revenue: 3+ months
• Annual Market Growth Rate: 10.5%
• Best for: Those who like to socialize with and plan or organize for others

One of the biggest untapped niches for augmented reality technology is in the eCommerce business and online retail space.

Large companies like IKEA and Home Depot are already using AR tech to improve customers’ online shopping experiences, letting them see furnishings in their homes before they buy.

Augmented reality can be just as valuable for online businesses in the fashion industry, as we’ve seen from interfaces like Warby Parker’s virtual try-on system.

As more businesses take advantage of online shopping to serve customers, the need for this kind of business tech will only increase. That’s why an AR-powered shopping interface is among the best business ideas to start today—you’re still in time to get ahead of this trend.

13. Food-delivery innovations

• Average Annual Revenue: $131K
• Average Profit Margins: 3.6%
• Startup Costs: $100-$9.5K
• Time To Revenue: 3+ months
• Annual Market Growth Rate: 6.7%
• Best for: People with good connections to restaurants, those who like to socialize and are familiar with delivery routes

Food delivery is another rapidly growing industry. According to the restaurant software Toast, 185 million people are expected to use food tech for ordering by 2025.

This includes 63% of millennials and Gen Z-ers, a target audience whose purchasing power is still on the rise.

While food delivery tech business ideas will need to compete with big established brands like Grubhub and Uber Eats, there are a lot of untapped niches in this space. For example, Slice has made its name focusing solely on local pizza delivery.

A tight local focus helped Trellus grow its business, too. Founder Adam Haber had the startup idea to help small local companies compete with big box stores, and they’ve now completed more than 35,000 deliveries. Hear their story in this interview:

14. Personalized healthcare and diagnostics

• Average Annual Revenue: $130K+
• Average Profit Margins: 5.4%
• Startup Costs: $100K-$3.5M
• Time To Revenue: 6-18 months
• Annual Market Growth Rate: 0.4%
• Best for: Medical professionals and healthcare experts

Lots of people today turn to websites like WebMD for answers to their health questions, but the limitations of these sites have been well-publicized.

This is where a tech business offering personalized diagnostic information can fill in the industry’s gaps, especially in conjunction with the expansion of telemedicine services.

A personalized healthcare app is among the top technology startup ideas for doctors, therapists, and others who have medical expertise they want to leverage to launch and grow their own online businesses.

15. Cyber security solutions

• Average Annual Revenue: $1.4K
• Average Profit Margins: 6.4%
• Startup Costs: $100K-$3.5M
• Time To Revenue: 6-18 months
• Annual Market Growth Rate: 2.2%
• Best for: Programmers, ethical hackers, IT professionals with strong analytical and customer service skills

As more people and businesses use cloud services and other online interfaces, the risk of data breaches and other issues grows. Businesses across industries need a reliable tech partner who can keep their data, systems, and networks secure.

This has created a boon for tech companies offering cyber security services. A recent survey from McKinsey & Company shows the cyber security market is growing at a rate of 12.4% a year, representing a $2 trillion opportunity for cyber security startup businesses.

A cyber security tech consulting startup is one way to get in on this growing industry. Other companies are utilizing artificial intelligence and machine learning to develop new cyber security software and tools.

The bottom line is that if you’re an entrepreneur with cyber security experience, there are ample profitable tech startup ideas you can explore.

16. Smart mobility solutions

• Average Annual Revenue: $449K+
• Average Profit Margins: 5.5%
• Startup Costs: $1K-$100K
• Time To Revenue: 3+ months
• Annual Market Growth Rate: 0.9%
• Best for: Logistics experts, travelers and drivers, vehicle repair and maintenance pros

The logistics and transportation industry has embraced digital transformation in the past few years, and smart mobility solutions are among the best startup business ideas in this space.

Smart mobility involves using technology like big data, telematics, and artificial intelligence to improve the transportation of goods and people. This could mean using data analytics for traffic management, establishing autonomous public transportation options, or creating mobility-as-a-service platforms and smart parking solutions.

Using advanced technology for community-centered startup models can be a very profitable tech business in transportation and logistics.

17. EdTech for specialized skills

• Average Annual Revenue: $234K+
• Average Profit Margins: 5.8%
• Startup Costs: $100-$1K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.1%
• Best for: Educators, people with niche or in-demand skills and expertise

Online learning has expanded access to knowledge around the world. Education institutions for all age levels have embraced the power of data analytics, artificial intelligence, and virtual reality to reach students in new ways.

An EdTech startup can take many forms. You could launch an online coaching startup that connects learners with teachers for one-on-one education. Other business ideas include using cloud technology to create learning platforms or starting a software development company that creates education solutions.

Teachers, professors, and other entrepreneurs with education experience are the best-positioned to thrive with an EdTech startup, but the truth is this niche is wide open for anyone with skills and knowledge to share.

18. Social networking for specific niches

• Average Annual Revenue: $60K-$160K
• Average Profit Margins: 8%
• Startup Costs: $500-$2K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 10.5%
• Best for: Bloggers, influencers, digital marketing and social media experts

Social media has become the go-to way for people around the world to find their communities. While a new tech startup might find it hard to compete with big-name platforms like Facebook or X, you won’t need to if you niche down into a community.

Finding and building that community is the most challenging part of starting a tech business in the social networking space. That makes strong digital marketing skills essential for anyone planning to start this kind of tech business.

19. Elderly care technology

• Average Annual Revenue: $1.1M+
• Average Profit Margins: 19.37%
• Startup Costs: $500-$5K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 2.0%
• Best for: Health and wellness experts, engineers, inventors, and IoT programmers

The percentage of the U.S. population that’s over 65 has been steadily growing. According to the Census Bureau, 16.8% of the population was over 65 in 2020, which represented a growth rate that’s five times faster than that of the general population.

This has driven an increasing need for elder care services, and tech companies can be part of that solution.

Some of the best startup businesses in this space include wearable health monitoring technology, memory aids, automatic pill dispensers, and other gadgets that allow seniors to maintain their independence.

Other profitable tech startup ideas related to elder care include animatronic pets, robot roommates, and senior-focused social platforms that help older people stave off loneliness and maintain social connections.

20. Event management and ticketing platforms

• Average Annual Revenue: $34K+
• Average Profit Margins: 12.2%
• Startup Costs: $500-$5K
• Time To Revenue: 3+ months
• Annual Market Growth Rate: 1%
• Best for: Strong networkers, great party planners, outgoing and social entrepreneurs

Event planning is a popular business idea, and you can take that concept high-tech by starting an event management platform.

This is another area where focusing on a niche is a smart business strategy. Instead of trying to compete with established companies like Ticketmaster or Eventbrite, you can hone in on a target market or geographic area that’s underserved by these all-purpose platforms.

21. Digital marketing automation

• Average Annual Revenue: $817K
• Average Profit Margins: 6.9%
• Startup Costs: $100-$10K
• Time To Revenue: 1-6 months
• Annual Market Growth Rate: 1.3%
• Best for: Advertising and marketing experts, people with skills in AI and software development

Most businesses today need to use digital marketing in some form to connect with customers, whether that’s through their business social media channels or via advertising like Google Ads or Facebook ads.

This kind of marketing can be time-consuming, however, and many business leaders don’t understand concepts like search engine optimization, lead generation and nurturing, or other critical factors in the success of a digital marketing campaign.

Digital marketing automation platforms take the guesswork out of effective online marketing while saving time in business owners’ busy schedules. For entrepreneurs with digital marketing expertise, creating this kind of platform is among the best tech startup ideas because of this high and growing demand.

22. 3D printing business

• Average Annual Revenue: $1.6M
• Average Profit Margins: 4.3%
• Startup Cost: $500-$250K
• Time To Revenue: 3+ months
• Annual Market Growth Rate: -5.6%
• Best for: Makers, inventors, designers, artists and creative entrepreneurs

A print-on-demand (POD) eCommerce business has long been one of the best startups, especially for those who want a business they can start and run from home.

The rise in 3D printing technology takes the POD landscape to an entirely new level. Instead of just customizing products for customers, you can create completely new customized items based on their specifications.

A 3D printing business is among the best tech business ideas for those who want scheduling flexibility or a semi-passive income. You can set up an eCommerce business platform to collect orders and handle fulfillment, then create the products on your own schedule.

While 3D printers do still cost more than your standard 2D printer, their average price has dropped substantially in recent years. Even a commercial 3D printing system can cost as little as $3,000-$5,000 in the current market, a very reasonable startup cost given the profit potential of this niche.

23. Robotics startup

• Average Annual Revenue: $48M+
• Average Profit Margins: 11.11%
• Startup Costs: $100K-$3.5M
• Time To Revenue: 6-18 months
• Annual Market Growth Rate: 24.7%
• Best for: Entrepreneurs with product development, electrical engineering, and mechanical skills

Another emerging technology that’s got a lot of potential for tech startups is robotics. Robots are utilized in a range of industries, from manufacturing plants to product delivery and a host of things in between.

Companies that use robots in their production or workflow processes need to get them from somewhere, and that could mean you if you start a tech business as a robotics startup.

24. Biotech startup

• Average Annual Revenue: $56M+
• Average Profit Margins: 16.90%
• Startup Costs: $100K-$3.5M
• Time To Revenue: 6-18 months
• Annual Market Growth Rate: 2.6%
• Best for: Innovative entrepreneurs with experience in biology, chemistry, environmental science, and similar fields

Biotech is basically any technology that’s based on biology. This technology applies the concepts of cells, molecular biology, and ecology to the tech industry, in the process creating very innovative ideas that can streamline and improve how people and societies function.

The main areas of biotechnology research currently are in the environmental, industrial, and healthcare sectors, but it’s certainly not limited to these areas. There’s a growing demand for biotech services in the agricultural space, for example, as well as in areas like nanotechnology.

Since most forms of biotech are still in the emerging technology space, the clinical trial period can be long and complicated. High startup costs and time to revenue are the primary challenges for companies in this sector.

25. Tech repair services

• Average Annual Revenue: $560K+
• Average Profit Margins: 5.7%
• Startup Costs: $500-$5K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.4%
• Best for: Electronics and repair experts, tinkerers and makers with strong organization and customer service skills

The more technology and devices are in use, the higher the demand for people who know how to repair them when things go awry. This makes a repair service one of the most profitable tech startup ideas.

One of the best things about this type of business is that you don’t need a ton of money to start. You can even avoid needing a brick-and-mortar space by offering mobile electronics repair or complimentary pickup and drop-off services.

Joe’s Electronics Repair was started with a shoestring budget, and in five years, it grew to a seven-figure revenue. Find out how he started his business and achieved such rapid growth in this interview:

https://www.youtube.com/watch?v=Rqce8NAZWYw

26. Social media consultancy

• Average Annual Revenue: $817K
• Average Profit Margins: 6.9%
• Startup Cost: $100-$10K
• Time To Revenue: 1-6 months
• Annual Market Growth Rate: 1.3%
• Best for: Marketing, advertising, and PR professionals with excellent customer service and communication skills

A social media consultancy firm works with other business owners to help them better connect with customers and develop brand awareness using these platforms.

The high demand for these services gives it the potential to be a very profitable business, especially if you leverage technology like automation and artificial intelligence to operate at peak efficiency.

One reason this is among the best IT business ideas is that it has a very low potential startup cost. If you’re skilled in using social media platforms, you can potentially start for free—just start taking clients through a freelance platform.

The costs are a bit higher if you want to utilize tools for SEO, natural language processing, and other advanced concepts. Even so, a social media business requires a much lower upfront investment than most of the tech startup ideas on this list.

As far as how much you can make, the sky’s the limit. The social media agency Socialistics started as a side hustle and quickly grew to make $500,000 a year. Hear how they built their company in this interview:

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

27. Web design business

• Average Annual Revenue: $239K+
• Average Profit Margins: 5.3%
• Startup Cost: $100-$1K
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.4%
• Best for: Designers, SEO/SEM experts, creative entrepreneurs with HTML, CSS, and other basic coding skills

A web design business is another popular tech startup for those who want to provide B2B services—and with good reason. You can make a lot of money creating and maintaining websites for other companies, and you don’t need a ton of tech skills or startup funds to get going.

Granted, the most successful web design firms do have some advanced knowledge of concepts like data analytics, graphic design, content marketing, and similar skills. As tech skills go, though, these are relatively basic and you can learn them for free through online learning platforms if you don’t already have them.

What is a good startup business?

There’s no one answer to that question. The best tech startup idea is one that matches your skills and interests as the founder and solves a problem or provides a necessary service to consumers.

To decide if a tech business is a good choice for you, start by thinking about your areas of expertise and the types of work that you enjoy doing. From there, it’s a matter of researching the market and existing competition to identify the best tech startup ideas for you.

How to start a tech startup

The specific steps will depend on the type of business you’re starting. In a general sense, though, this starts with doing some research to verify and validate your business idea.

Once you think you have a successful business concept, the next step is to write your business plan to clarify the exact services or products you’ll provide, how you’ll differentiate yourself from other businesses in the niche, and how you’ll connect with your target audience.

Securing financing is the biggest hurdle to turning many tech ideas into real-world businesses. A combination of personal funds, business loans, and investor funding is often necessary to get tech startups off the ground.

How many tech startups fail?

Startup businesses in general have a relatively high failure rate, with roughly 10% failing in their first year and a failure rate of up to 90% overall, depending on which statistics you look at.

Businesses in the tech industry do tend to have a higher failure rate than other industries overall. It’s estimated that roughly 63% of tech businesses fail within their first five years. That number is lower for companies that are backed by venture capital or other investors, however, with a failure rate of around 30% for venture-backed startups.

How many tech startups are created each year?

This is another figure that varies year to year, with an increasing number of tech startups emerging each year as new technologies develop. Data from Microsoft indicates there are roughly 50 million new tech startups launched each year globally.

How to compare tech business ideas

You want to consider your business idea based on a range of factors to give yourself the highest chance of success. These can include:

• Your knowledge or expertise
• The current demand in the market
• Common customer problems or unmet needs
• Competition within the sector from other businesses
• Your geographic area and its needs
• Availability of the technology needed for the business
• Startup costs
• Average time to profitability
• Time investment required
• Industry growth trends

What are the most profitable tech startup ideas?

The most profitable tech startup ideas are ones that solve a problem for the most people. Online courses can reach up to 80% profit margins. There are plenty of other tech startup ideas that can make great profits, too. Social media has consistently been a high performer as have medical devices and energy startups.

When considering a tech startup idea, always conduct thorough market research, understand your target audience, and focus on solving real problems or improving existing solutions. Remember that a startup's success depends on execution, dedication, and adaptability to market feedback.

Which tech startup idea do you like?

We’ve introduced dozens of tech startup ideas to help you land on one that can be highly profitable. Remember, it helps to be passionate about your pursuit, too, because you will face challenges that will be difficult to overcome.

You’ll also want to have a thorough business plan with an inspiring mission and vision to help your company get the funding it needs to achieve its potential.

One of the reasons Elon Musk gets cut so much slack despite constantly drawing negative attention is because his goals align with a mission of saving the human race.

From Tesla trying to help us reach zero carbon emissions to SpaceX trying to take people to other planets and his purchase of Twitter to protect free speech, Musk shows us he’s trying to help humanity.

Your tech startup idea should aim to achieve similar lofty goals. What type of startup ideas do you like?