How to Start a $9K/Month Carpet Cleaning Business (with $3K Budget)

  • by Brandon Boushy
  • 4 months ago
  • Blog
  • 0
Happy cleaners cleaning a green carpet

Have you ever wondered how to start a carpet cleaning business?

Matt Crimi started North Seattle Carpet Cleaning with a $3,000 loan and a course from a janitorial supply company. Now he’s on track to make $108k this year! We’ll show you how to do it too.

If you want to know how to start a carpet cleaning business keep reading. We’ll walk you through the process with tips on:

  1. Developing the skills to run a carpet cleaning business.
  2. Choosing a name for a carpet cleaning business.
  3. Writing a business plan for a carpet cleaning business.
  4. Registering a carpet cleaning business.
  5. Funding a carpet cleaning business.
  6. Preparing for launch
  7. Operating a carpet cleaning business
  8. Marketing a carpet cleaning business

Step 1: Developing the skills to run a carpet cleaning business

Before you start a carpet cleaning business you’ll need to develop some skills. When starting a carpet cleaning business, you’ll need to be familiar with the following skills or hire someone who is:

Each of the links will take you to free Udemy classes on the subject matter to help entrepreneurs develop their skills in their personal time.

I know. Learning all these skills can be a challenge, so let me answer some common questions.

Is carpet cleaning a good business to start?

A lady cleaning a carpet using a vacuum cleaner

There are a ton of articles written on the best business to start. Most consider cleaning businesses like North Seattle Carpet Cleaning one of the easiest types of businesses for a new small business owner to start.

Matt told us:

I had an Economics degree and experience doing forestry and wildlife management work. The logistics and equipment management are similar (Outdoor environmentalism vs indoor environmentalism).

He went on to explain:

My dad lent me $3,000, and I took a carpet cleaning tech course offered at a local janitorial supply company.

That sounds like a really reasonable startup cost, but how much can you make owning a carpet cleaning business?

Matt told us:

I make $9,000 in revenue per month.

According to ChemDry, their franchise owners average over $90k per franchise. Sounds like the carpet business is a pretty reasonable industry to operate in.

Step 2: Choosing a Name for the Carpet Cleaning Business

Every carpet cleaning business is going to need a name. It’s how your customers will identify the carpet cleaning business.

Several considerations should be considered when naming your carpet cleaning business. Keep reading for some considerations.

Does the name explain the carpet cleaning business?

North Seattle Carpet Cleaning tells exactly what it does. It cleans carpets. Try to follow their example to create a company name that readily identifies your services.

Is it easy to spell?

Make sure your carpet cleaning business name is easy to remember when using a search engine.

Register domain names for common misspellings and forward them to your website to make sure you don’t lose customers due to spelling mistakes.

Location

Including your state, county, or city identifies you as a local business. North Seattle Carpet Cleaning took this approach. Matt told us:

I went with a territorial name ‘North Seattle’ so it would naturally come up in online searches.

Branding

Designers creating a good branding for business

Does your name fit your branding? Some business owners focus on visual ideas for a logo before a name.

North Seattle Carpet Cleaning uses a logo that readily communicates what it does.

In addition to the name, the logo shows a person cleaning carpet and the Space Needle, a famous attraction that is readily identifiable as a Seattle landmark.

Register a .com

Find a name for which the .com domain is available. It’s the most recognizable. Use Namechk to find out if the domain name you want is available.

Give it a go!

See how people like it. Make sure to check what happens if people shorten it. 

You wouldn’t want to name a carpet cleaning business Seattle Uber Clean Klub because it could get shortened to SUCK, and that isn’t what you want to communicate.

Check Google Trends. Read articles like Five Tools for Naming a Business. Finally, register your business name with the government. Keep reading to learn more about registering your name and choosing a legal structure.

Step 3: Writing a Carpet Cleaning Business Plan

Small business owners who write a business plan tend to have 30% faster growth because the business plan helps guide their decision-making.

Matt is on board with this thinking. He explained:

I initially wrote out a business plan. I think it helped orient me in the right direction. I think I should write it out again now that I’m in a different place than when I started.

If you want to start a successful carpet cleaning business, I highly recommend you write a business plan and use it to guide you while you grow your carpet cleaning business. The aspects that need to be covered include:

  • Business Plan Cover Page
  • Table of Contents
  • Executive Summary
  • Company Description
  • Description of Products and Services
  • Marketing Plan
  • SWOT Analysis
  • Competitor Data
  • Competitive Analysis
  • Marketing Expenses Strategy 
  • Pricing Strategy
  • Distribution Channel Assessment
  • Operational Plan
  • Management and Organizational Strategy
  • Financial Statements and/or Financial Projections
  • Funding

This outline is directly from my previous article, How to Write A Business Plan. Make sure to read it and download the template to create a business plan that will walk you through the steps to starting a commercial cleaning business.

Step 4: How to Register a Business

A man doing online registration on his iPad

Once it’s time to register your new carpet cleaning business, you’ll be dealing with several government agencies.

There are federal, state, and local laws governing an owner’s legal requirements when starting a business. Let’s look at the most common requirements.

Licenses, permits, and tax forms

Each location has different licenses, permits, or tax forms required. Use the SBA License and Permits page to identify what your carpet cleaning business needs. Keep reading for information on different legal structures.

Sole proprietorship

A sole proprietorship is the easiest way to start a company, but the structure doesn’t protect the owner’s personal assets from legal issues.

That means if something goes wrong, you could lose both your carpet cleaning company and your home.

I’d only start a sole proprietorship if you really need to save some money at the very beginning.

Because you’ll be in customers’ homes and offices providing your service, it is important to prevent personal liability. As soon as you can, convert it to an LLC.

To start a sole proprietorship, fill out a special tax form called a Schedule C. Sole proprietors can also join the American Independent Business Alliance.

Limited Liability Corporation (LLC)

An LLC is the most common business structure used in the United States because the company protects the new business owner’s personal assets.

It’s similar to partnerships and corporations but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.

Each state has different requirements. Here’s a link to find your state’s requirements. People may register in specific states due to the cost of doing business.

Delaware and Nevada are common states to file an LLC because of their business-friendly laws. Here’s a blog on the top 10 states to get an LLC.

Partnerships and corporations

Partnerships and corporations are typically for massive organizations or legal firms. Unless there is a specific reason you need a partnership, it is better to do a multi-person LLC.

Investopedia has good information about partnerships and corporations.

Apply for an EIN

Every business operating in the United States needs an employer identification number.

It’s like a social security number for your business. Apply for it on the IRS website. It’s used on tax forms when filing taxes and to tie employees’ pay to the proper employer.

State/Local Business Licenses

Each location has different licenses, permits, or tax forms required. Use the SBA License and Permits page to identify what your business needs. You’ll want to look for a cleaning business license as the type of license.

Unemployment Insurance

The U.S. Chamber of Commerce has a ton of resources on unemployment insurance (UI) and also offers links to each state agency that handles state unemployment.

You’ll have to pay $420 per employee on a federal level plus any state UI.

Step 5: Funding a Business

Man at with a monitor on his desk

Opening a cleaning service requires time, money, or both. Hopefully, you’ve created a business plan already and have a good idea of the minimal financial resources necessary when starting a carpet cleaning business.

Here are some considerations you should look at when seeking funding:

  • What equipment, software, and inventory do I need?
  • How much will the carpet cleaning equipment cost?
  • Will I need a location where customers can come? If so, how much will it cost?
  • What are the costs for marketing and a website?
  • Will the company have employees or sub-contractors?
  • How much money is currently available to start a carpet cleaning service?
  • How many routine customers do I have? Will the current revenue and savings cover costs?
  • How much financing do I need?
  • How will I get the financing?

You’ll need to know the answer to each of these questions when you start a carpet cleaning service.

If you have created a business plan, you’ll already know the costs and financial needs of the cleaning services. Keep reading to learn more about ways to fund carpet cleaners.

Matt explained how he got funding and what it went to:

My dad lent me $3000 to get started. Much of the initial cost was the equipment I needed. I bought a portable carpet cleaning machine, along with the hoses and attachments necessary to start cleaning.  I had to trade my car in for a larger vehicle to transport the equipment to jobs.  One of the first things I did was join BNI, and that meant paying about $500 for their annual fees. I also took a carpet cleaning tech course offered at a local janitorial supply company.

How much does it cost to start a cleaning business?

Most commercial carpet cleaning businesses can be started with less than $5,000. A commercial carpet cleaning business will normally get funding from at least one of the following sources:

  • Personal Savings
  • Loans or Gifts from Friends and Family
  • Small Business Loans
  • Crowd Funding
  • Credit Cards

Personal Savings

If you’re working, put aside part of your income every paycheck. Most financial advisors recommend putting at least 8-10% of your income into savings.

One of the best ways to fund mobile carpet cleaning is to open a business bank account and transfer money into it every paycheck.

This will help you develop a banking relationship under your business name if you decide to take out a business loan in the future.

Nerd Wallet has a great list of free business checking accounts. Check it out and decide which one is best for you.

Loans or Gifts from Friends and Family

If your friends and family have the money, they may be willing to help launch your cleaning business. Just make sure you get in writing the terms of the loan or gift. Make sure to follow through on the agreement.

You may be able to negotiate pre-payment for services as a way to fund your small business. If you can negotiate to provide your family and friends your business services, congratulations! You have your first customers.

I will warn you, I thought “When I start my own business, everyone I know will be supportive.” I was wrong. Most of my network fell into two categories:

  • “Isn’t this risky? Shouldn’t you go get a job?”
  • “Can I get your service for free?”

Needless to say, neither of these responses helped start a business. Be careful about working for your personal network. They can be a drain on your business.

Small Business Loans

A lady holding an iPad and a credit card

Most banks offer small business loans. If you can qualify for them, loans are a great way to start a business. Unfortunately, the requirements for business loans have become more challenging than they were in the past.

Banks want to invest in a successful business, so they’ll be looking to loan to people who are in a growing field and have unique ideas.

If your business model is similar to existing businesses, you may find it a challenge to get bank loans before generating substantial revenue.

Business owners should make sure to document their business idea meticulously before applying for loans.

A bank will expect entrepreneurs to have a thorough understanding of the industry, customer, and costs associated with the business idea. The business plan will be crucial while applying with banks.

Upflip has developed relationships with lenders to help our readers seek business funding. Check out our Business Loans page for our preferred resources.

Crowd Funding

With the rise of social media and online businesses, companies have a new way of reaching customers and getting funding for their business idea.

Crowdfunding is a way to start a business where you come up with the business idea, create a request for funding, and people who like the idea help fund it.

GoFundMe and Kickstarter are the most well-known crowdfunding sites, but others help people start a business. Take a look at this article to find the crowdfunding site that is right for you.

Read our blog about Pooch Selfie to get insight into the process Jason Hernandez used to start his company with Kickstarter.

Credit Cards

You can use business or personal credit cards to start a carpet cleaning business, but the rates associated with them can increase the costs dramatically.

Businesses that use credit cards to start a carpet cleaning business should be aware of the interest rates and make sure they have the funds to pay the monthly bills.

If you have to pay interest on the credit because you didn’t pay it in full, you may be paying up to 25%.

While credit cards are one of the more costly ways to start a business carpet cleaning, they are also one of the easiest. As long as the business owner has good credit, it is pretty easy to get a credit card. After routinely paying it off, you can request a higher credit limit. For some, it might be the best option.

I personally prefer using Credit Karma to decide which kind of personal credit card to get. They have recommendations based on your personal credit history. Find out what they recommend online today.

Step 6: Preparing to start a commercial cleaning business

We can’t discuss how to start a carpet cleaning business without discussing preparing for carpet cleaning services.

During this stage, you’ll want to take these actions to prepare to start cleaning carpets. Some of the primary tasks in this phase will be:

  • Getting equipment, inventory, and other supplies.
  • Creating a website.
  • Setting up social media accounts.
  • Signing up for payment processors.
  • Setting up a Customer Relationship Management system and other administrative software.
  • Establishing a physical location if necessary.
  • Getting general liability insurance.

Let’s look at what you need to do with each of these to start your own carpet cleaning company.

Carpet Cleaning Equipment, Inventory, and Other Supplies

Every cleaning company will have certain equipment they need to accomplish the job. In the case of a carpet cleaning business, you’ll need:

  • A truck or van – Just search “dealerships near me.” They should have a truck that works.
  • A Carpet Cleaning Machine – Bissell, Janilink, and Hoover are some brands to consider. 
  • Carpet Cleaning Tools – Make sure they are compatible with the model of the machine you buy.
  • Cleaning products – Make sure they are compatible with the model of the machine you buy. Eco-friendly products can be used as premium or differentiating products.

I would typically look for cleaning equipment online or at trade stores. If you have a Home Depot or Lowes nearby, you can find carpet cleaners there.

Create a website

An entrepreneur creating a website for his business

Everyone should have a website. If you are selling products, you may need an online store. Mobile apps are great for restaurants and companies with reward programs.

All of them serve the same purpose: helping your customers learn more about the products or services the business is selling.

Check out our blog on how to create a website to learn how to build your own website or online store.

Setting Up Social Media Accounts

Every business needs social media. Your customers expect to be able to reach you there. Which social media you need depends on where your customers are. In general, my suggestions are to use the following:

  • Facebook – Selling products or services to people over 30.
  • LinkedIn – Selling products or services to other businesses.
  • Twitter – Best for current events.
  • TikTok – Best for products and services for kids and teens
  • Instagram – Best for products and services targeting people under 35.

You just need to create an account and start posting relevant content. Make sure to read their business help pages as they have a ton of tips for how businesses can make money using their platforms for marketing.

Choosing a payment processor

Paypal and Square are the payment processors that most businesses use, but there are plenty of other options.

Unless you have large quantities of transactions and high ticket items, the differences between most are nominal.

Payment processors typically charge a per-transaction fee and a percentage of sales. Make sure to price that into the cost of doing business.

The other consideration you’ll need to think about is this: how will you accept payments?

  • Online
  • In a store
  • At different locations
  • A combination of the above

The ways your company will accept payments will impact which processor is best for you. To determine which payment processor is best for you, try Credit Donkey’s payment processor quiz.

Setting up a CRM and other administrative software

Every company needs software to support operations. Typically this will consist of a Customer Relationship Management program like Hubspot or Salesforce.

Both CRMs can connect to email, social media sites, marketing, inventory platforms, and more.

The purpose is to have as much knowledge about your customers as possible so you can make better decisions about how to market to them.

It also helps you establish which types of prospective clients to target your marketing towards based on which tends to generate the highest sales.

Other platforms you might want to connect Hubspot to include Xero for accounting.

Finding a physical location

If you need a physical location for your carpet cleaners, I suggest reaching out to a commercial real estate agent. They’ll be able to help you find a location that meets your needs.

In general, I’d suggest waiting until you have another truck or two before getting a physical location. This will reduce startup costs and help you grow your business faster.

Once you have several employees and need more space to store all the equipment associated with carpet cleaning businesses, I’d recommend looking in the commercial warehouse district.

Getting business insurance

A man holding a stamp with the word "insurance"

Carpet cleaning businesses may need several types of business insurance that most people don’t normally carry. The 3 primary insurances the cleaning industry might need are:

  • General liability insurance- Used when a freak accident occurs. Typically $1m/2m coverage is needed, but it varies based on location and type of business.
  • Professional liability- Used when the work you are doing causes damage. If a carpet cleaner causes mold, this would cover the mold remediation service.
  • Cybersecurity insurance- This insurance protects against cyber attacks. If your systems are hacked, it will help protect your company.

Contact your personal insurance agent to see what insurance costs are. If they don’t offer the right insurance, they’ll be able to recommend someone who offers the coverage your industry needs.

Step 7: How to operate a carpet cleaning business

You’ve done all the preparation to get started. Now it’s time to start washing your customers’ carpets. Time management is the key here. Some tips I’ve learned over the years of running a business include:

  • Plan specific times of day to focus on tasks like:
    • Sending emails
    • Performing marketing tasks
    • Handling payroll
    • Doing interviews
  • Keep consistent business hours. If customers don’t know when you’ll be available, they’ll go to someone who they know is available.
  • Provide estimates you know you can meet. A customer would rather be quoted more and spend less than being approached for more money later. The same goes for time.
  • Set time aside for life. Entrepreneurs are notorious workaholics. If you don’t make time for the other aspects of life, they will suffer and seep into your work.
  • Keep business and personal accounts separate. Depending on your legal structure, this is mandatory.
  • Put 50% of the revenue aside for ongoing expenses, tax payments, and re-investing in the business. If you don’t do this, you’ll eventually have a scenario where you have to come up with the money you don’t have.
  • The customer expects their home to be spotless when you leave. Use Industry best practices like wearing booties in their home to protect the customer’s property.

Step 8: Marketing Your Commercial Carpet Cleaning Companies

Marketing is done to make money, but it costs a substantial amount of money too. The SBA suggests spending 8% of the desired revenue on marketing.

That means if you want to make $100k/year you need to spend $8,000 a year on marketing. That is a lot for a carpet cleaning business income.

If you don’t have the 8%  of desired revenue to spend on marketing, use 8% of your startup costs. In Matt’s scenario, 8% would be approximately $240, but he spent more than that. He told us:

One of the first things I did was join BNI, and that meant paying about $500 for their annual fees.

This sounds like a great strategy. I hadn’t heard of BNI before today, but it’s basically a networking and referral program for local businesses.

I found it so interesting that I have scheduled an appointment to meet with my local chapter. I’d suggest checking it out.

Matt also told us:

I went with a territorial name “North Seattle”  so it would naturally come up in online searches. I made sure to have a nice-looking website and a Google business page. I recently hired my first employee and am now exploring Facebook and google ads. I also put up ads on Next Door and Yelp occasionally.

Matt used some of the best cost-effective ways of marketing a carpet cleaning business. I’d suggest using similar strategies if you pursue a carpet cleaning business opportunity.

When you start going into Google Ads and Facebook Ads, you need to have a more thorough understanding of your target market.

You also need to have an understanding of the CPC and CPA strategies because the advertising costs can add up quickly.

I strongly recommend hiring a marketing professional to manage any paid ads. Upwork is a great place to find freelancers whom you can pay based on the level of service you need.

Related Reading

A book of ideas for a successful business

Normally we would provide a list of influencers to follow, but Matt offered us a list of his favorite books and business resources. I felt like this might help you better understand how to start a successful cleaning business.

Check out his list of suggested reading!

Conclusion

Now that you know how to start a carpet cleaning business, I hope you”ll attempt to start a small carpet cleaning company. If you would rather invest in a carpet cleaning business for sale, check out our business listings.

If there aren’t any cleaning companies that fit your investment criteria on our site, check out these franchise opportunities:

Because these franchise opportunities have a proven method, they offer a carpet cleaning business start-up package that you know will work properly because the commercial carpet cleaning equipment is meant to meet their standards related to addressing their market.

Subscribe to our blog to keep up with what business owners are doing to maximize their profits. 

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