Starting a cleaning business can put you on the fast-track to high revenue potential without a huge up-front investment. Cleaning is a line of work with almost unlimited opportunities and customers, and even a simple operation can see big profits.
Want proof? Just look at Austin Miller, founder of Seattle-based cleaning company Spruse Clean. They’re on track to top $1 million in revenue in just their third year of operation. That’s especially impressive, considering Austin had all of $200 in his bank account when he started.
We interviewed Austin to find out how he started and scaled Spruse Clean. He’s got lots of great advice to share, so you should definitely watch this episode if you’re thinking of starting a cleaning business.
Today, we’ll go through the step-by-step of how to start a cleaning business. It’s an industry expected to generate over $46 billion dollars in earnings in 2020 and grow 10 percent by 2026. If you want to scrub your way to a successful future, this guide will tell you exactly how to do it.
Alternatively, buying an existing cleaning business, like those on our cleaning businesses for sale listings, can be a faster, simpler way to get started.
Step 1: Get training and experience
Training and experience are useful if you want to learn more about a certain type of cleaning business, such as swimming pools, hospitals, or tenant turnover. If you want to clean offices, working for a local company that does just that will give you excellent first-hand experience.
Cleaning jobs can show you how business owners manage operations, cleaning products, customers, hourly rate, and pricing. Alternatively, get training in vocational and community colleges could be a way to gain some of this knowledge.
International Sanitary Supply Association (ISSA) offers certification programs. Completing one will land you a place in their database of certified professional cleaners.
Clean-freak dad wasn’t bad
While official certifications can be helpful, they’re not necessary. Any cleaning knowledge and expertise will serve you well in this industry, as we learned from Corey Edmonds, whom we’ve also interviewed.
His passion for cleaning started during childhood. As Corey says:
With his dad’s instruction Corey took to cleaning like a solvent to an ink stain, gaining valuable experience along the way.
Step 2: Dust off your skills
What the customer feels when they do business with you is one of the most important things in business. In a nutshell, demonstrating your skills will make customers feel like they made the right choice by hiring you. As Austin says:
Part of that experience, of course, is being satisfied with your clean. How do you make sure that happens? Here are some tips:
Polish your soft skills
Cleaning is a customer-service-oriented business, so soft skills are super important. You need to dust them off and polish them to a shine. Brush up on your soft skills for starting a small cleaning business. Udemy and SCORE offer awesome training.
Tighten up your technical skills
Customers expect you to be the expert and trust you to work in a safe manner. The risk of injury and death is real. Think about that for a minute. So, just what kind of technical skills does one need to be a successful cleaner?
Cleaners should have skills in some or all of the following areas:
- Flammable liquids
- Air contaminants
- First aid
- Hazardous chemicals in cleaning supplies
- Powered equipment and vehicles
- Asbestos, lead, etc.
- Protective wear
ISSA publishes a free manual with information you need called CMI Cleaning 101. Check it out!
Step 3: Write a business plan
Here’s the deal, you need a business plan. It will help you define your vision, objectives, and strategy. It’s a living document that you can use to accomplish things, such as securing financing or partnering with other businesses. Make sure you write one!
Try these business plan templates. Want to know the best part? They’re are all free!
- One-page business plan
- U.S. Small Business Administration (SBA) Business Guide
- State-specific templates
- Business Plan Template for a Startup Business
It gets better! Here’s a list of free and low-cost resources:
- How to Write a Business Plan
- SCORE’s free business plans and startup assistance resources
- The Complete Business Plan Course (Includes 50 Templates)
Step 4: Determine what type of cleaning business is right for you
Conduct research to determine what is right for you. Click here to see a list of cleaning companies and what they offer.
In the case of Spruse Clean, their focus is residential cleaning. Their reason, in Austin’s words:
An appealing middle ground can be corporate residential cleaning. This involves cleaning homes owned by large corporations like Amazon or Google for their staff. The work is still residential cleaning, but you’ll be paid from a corporate bankroll—in some ways, the best of both worlds.
But wait, there’s more! Green cleaning caters to a growing niche market. The U.S. Environmental Protection Agency (EPA) offers guidance, including the green seal products search.
Spruse Clean doesn’t just use eco-friendly products—they’ve created a line to sell them to consumers. As Austin says,
Step 5: Select a business name
What’s in a name? Well, a lot! There are a few things to keep in mind. Keep reading.
Does it state what you do?
If you wash windows, is “window washing” in the name? Describe what you do, but don’t limit yourself too much by being too specific because businesses evolve. Keep it loose!
It is easy to spell?
Will someone be able to spell your business name in a search engine? Be sure to register alternate spellings as domain names that forward to your website.
Consider including the name of your state, county, or city because it adds credibility. For example, DFW Cleaning includes the abbreviation for the Dallas-Fort Worth metroplex.
Does your name translate to the branding you want? Kiwi Clean brands itself with a picture of a kiwi fruit. Simple, right?
Register a dot com
Find a name for which the .com domain is available. It’s more mainstream and makes your business seem more established. You can conduct a search by clicking here.
Give it a go!
Corey’s business name (Pacific Northwest ProWash) is an excellent example of all those advice points above.
Once you have a name idea, run it by your friends and family. Test it on Google Trends. Read this article on five tools for naming a business. Finally, register your business name with the government.
Step 6: Establish a legal structure
So let’s begin, you need to establish a legal structure. For best results, work with an attorney, accountant, tax specialist, or government official.
Licenses, permits, and tax forms
Regardless of the legal structure, determine if your cleaning services company requires any licenses, permits, or tax forms to operate legally. Use the SBA’s tool by clicking here. Let’s dig a little deeper.
A sole proprietorship is the easiest way to start a business. The cleaning company does not protect the owner’s personal assets. You must fill out special tax form called a Schedule C. Sole proprietors can join the American Independent Business Alliance.
Limited Liability Corporation (LLC)
LLC is a favorite choice for a cleaning business because the company protects the owner’s personal assets. It’s a hybrid of a partnership and a corporation and requires a special document called an operating agreement.
Partnerships and corporations
Partnerships and corporations aren’t common for cleaning services. You can learn more about them here.
Many franchise opportunities exist in the cleaning industry. A franchise consists of a franchisor company and franchisee in a joint venture to sell the franchisor’s products and services. In essence, a franchise enables you to enter the market with a ready-made cleaning company. Well-known franchises are The Maids, ChemDry, and PuroClean.
Step 7: Consider hiring employees
Imagine what it would be like to have so many referrals and so much business that you can’t handle it all yourself! While many cleaning businesses are one-person operations, many owners find that it helps to have employees to rely upon, for both practical and profit-based reasons. After all, you might want to take a vacation!
To learn about hiring employees as part of your new business, take the next step by reading this section.
Employer Identification Number
Obtain an Employer Identification Number (EIN) from the IRS for your company. Apply for one by clicking here or call 800-829-4933.
Tax filing and withholding
Federal and state tax filing requirements apply to new employers. You will need to keep records of employment taxes for at least four years, which involves special forms and accounting for state taxes. But don’t worry, because the IRS publishes a handy guide for employers that is available here.
Unemployment Insurance Tax
You will be need to pay Unemployment Insurance Tax through the UI Program under the Social Security Tax for employers.
Federal employment and labor laws
This is the next piece of the puzzle. Employers must display Workplace Posters. You can download them at their website.
Other requirements include:
- Employment Eligibility Verification (Form I-9)
- State’s New Hire Program
- Worker’s Compensation Insurance
- Disability insurance, as required by some states
- Occupational Safety and Health Administration (OSHA)
Compensating employees is probably going to be your biggest expense. Let’s take a closer look.
Corey uses a pay-for-performance compensation structure where employees receive a percentage of every job they complete. This gives them a chance to move up to a higher commission level, based on how they perform.
Austin, on the other hand, focuses on paying his staff a high hourly wage. Spruse Clean cleaners are among the best-paid in the industry, and that shows in the quality of the work they provide to customers.
Other types of pay
For many cleaning services, paying employees a fixed wage per hour works just fine. If your new business won’t require staff to double as salespeople, then stick with a pay-per-hour or salary compensation structure. To decide, check out this article, “How to Create a Pay Structure That Promotes Team and Company Growth.”
Step 8: Obtain equipment and supplies
These depend on the type of service you provide. In Austin’s case, he started with a Shark vacuum and a few microfiber towels. His low initial equipment costs were one big reason he was able to start with such a small investment.
If you’re curious what equipment you’ll need for most cleaning businesses, see the guide here.
Corey acquired equipment at rock bottom prices by purchasing an existing cleaning company. We have some good advice on how to evaluate the worth of a business, read the complete guide here.
Some clients have terrible allergies. Cleaning companies must be sensitive to this aspect of performing cleaning jobs. If a client has pets, consider using the client’s equipment to keep the pet hair isolated to their home.
Can you make your own supplies?
Rather than pay for their solvents and cleaning products, Spruse Clean is working to manufacture their own. This doesn’t just cut down on their overhead. It’s also created a completely new revenue stream for the company.
Spruse Clean sells a full line of eco-friendly cleaning products, from sponges to all-purpose cleaners to towels, all delivered right to the customer’s door the next day. Basically, they’ve replaced the entire cleaning aisle at the grocery store.
Austin’s reasoning for this is simple:
Selling these products also lets Spruse Clean grow their visibility and customer base. As Austin explains:
Selling a line of eco-friendly products lets them push their revenue potential beyond the cleaning services offered in their area.
Step 9: Establish a location
Perhaps you’re wondering if you need to rent a space to run your cleaning business. First, most cleaning businesses can operate from home, for the following reasons:
- Equipment and supplies can be stored at home
- A room in the home can be converted to an office
- Work is performed outside of your home, so clients won’t come there
- Most homes are well-suited to starting a residential cleaning business
- With enough parking and storage space, performing commercial cleans can also operate from home
Know the local ordinances
Local ordinances might not allow you to operate your cleaning business from home. Why does starting a cleaning business have to have so many rules? Just search Municode Library to find the rules in your municipality.
Storing cleaning supplies for a cleaning business at home
Starting a cleaning business where children and pets live near hazards is something a business owner must evaluate seriously. The EPA offers guidance on handling Household Hazardous Waste (HHW) and the Organic Consumers Association provides a list of safer cleaning products.
Step 10: Practice safety
Corey runs two-person crews because there is safety in numbers. A crew member could fall off a roof and no one would know. For specific safety guidance, refer to OSHA guidelines about the cleaning industry.
Think about this for a moment: Cleaning businesses have the huge responsibility of protecting everyone by keeping spaces clean and free of diseases-causing pathogens. Arm yourself with knowledge by clicking the link below. There’s good stuff there.
Step 11: Insure to ensure you’re protected from risk
We’ve all been there, wondering if the expense of insurance is worth it. Commercial clients require a cleaning company to have it and experts recommended it for others. General liability insurance covers property damage and bodily injury.
For additional information, read this article.
Step 12: Tidy your finances
Budget or you’ll fudge it
We’ve all done it, promise to make a budget and stick to it. This is even more important in business than in your personal life.
While Austin started Spruse Clean with a shoestring budget, he wouldn’t necessarily recommend that approach to everyone. His advice for anyone starting a cleaning business:
Udemy offers inexpensive courses on budgeting that are worth checking out. Consider accounting software, such as Xero or QuickBooks.
Admire the many facets of funding
Ever wondered why so many people get into the cleaning business? The answer is that it has a low barrier to entry. Initial investment in starting a home cleaning business can be one shopping trip to a home improvement store.
Funds to start your cleaning service can come from:
- Personal funds
- Loan from family or friends
- Business partner
- Government programs
Alternative sources of funding include:
- Credit cards
- Home equity loan
- Rollover for business startups (ROBS)
Make sure the price is right!
One of the reasons Spruse Clean attracts and keeps so many customers: their prices are highly competitive, and much lower than their competition’s. They still pay their staff well and grow their profits year after year, too. As Austin says,
Austin tries to keep his profit margins around 45%. That allows him to set fair prices for customers and fair wages for staff, while still driving big profits for the business.
Develop a pricing structure
Corey quotes prices on square footage, not time. This enables his estimators to consistently quote a job. Clients and potential customers appreciate it as well.
Austin, on the other hand, has developed an innovative way to give estimates to new customers. Spruse Clean uses an online interface, where customers can enter the size of each room and exactly what needs to be cleaned.
Using this interface, customers know exactly how much each room will cost them and lets them customize their cleaning services to fit their budget. Best of all, Austin’s team doesn’t have to devote time to customer estimates. That cuts down on wasted man hours and helps their business run lean.
Charge more for the initial cleaning
Initial cleaning takes longer because a deep cleaning happens first. Make sure you allot time to find out where everything is, such as electrical outlets, which you will need.
Increase prices every year
Corey advises that,
As such, he increases his prices by five percent every year and adjusts for minimum wage increases. He did not report losing clients over this. For business owners, this makes sense, right?
Use a contract
A contract defines the scope of work for the price. Itemize everything and have a separate sheet for extras the customer might request. List your flat or hourly rate so that everything is clear to your clients. Get one for commercial cleaning clients and a different one for residential clients.
Step 13: Know your ideal customer
Corey developed a customer avatar of his ideal customer for his cleaning service business. This helps him to sell cleaning jobs to clients that need his service and will patronize his business. Like he says,
First ask yourself, who needs and can afford your service at your desired price point? Jump right in by reading this great article on making your own customer avatar on Forbes.com. After that, make an effort to find these people!
Step 14: Have a sales and marketing strategy
Prior to starting a cleaning business, first make sure you research the local area to define your target market and competitors for the cleaning services you offer, then focus your efforts in the area where you want to do business.
Austin lucked into his first customer base, but how he built off of that luck is something you can learn from. His first customer carried over from his previous work as a home renovator. This customer lived in a 600-person high-rise building and referred Austin’s services to the building’s managers. From there, Austin says,
Market your business or watch it go down the drain
Marketing is one of the biggest expenses in Austin’s budget. He spends an average of $2,000 per month on marketing, primarily on Yelp! and Google ads. This investment has led them to be #1 on Yelp! among cleaning services, and the #6 search result on Google.
Digital marketing includes email newsletters, social media, and search engine optimization (SEO). Neil Patel is a renowned authority in this area. Check out his website by clicking here.
Printed materials include business cards, flyers, brochures, t-shirts, and even car magnets! Canva is a great tool for designing your own materials.
One of Austin’s marketing strategies early in Spruse Clean’s life was providing fliers for building managers to distribute to residents and new move-ins. These fliers gave customers 35% off their first clean. Most customers who took advantage of this sale were so impressed with the service they happily paid full price the next time.
Cold call potential clients, issue coupon codes, start a referral program, and take advantage of word-of-mouth advertising!
Outshine competitors with a sparkling image
There are plenty of customers to go around in the cleaning sector. As Austin says,
The trick is making your cleaning company one customers trust. A lot of this is based on the image you present to your customers. Here are a few ideas to keep your brand as pristine and spotless as a freshly-cleaned home.
It’s a dirty job, but don’t leave the house with messy hair, sweats, and old shoes. Get a uniform so you can be a walking advertisement for your business!
Brand your vehicle with a car magnet or a vehicle wrap. Just think about it: When your parked vehicle is in front of your customers’ establishments, others will see that someone hired you. It’s great advertising!
Keep your equipment, vehicles, and language clean. Be punctual. Maintain an appropriate online presence and use professional-looking marketing materials that are free of spelling, grammatical, and punctuation errors. Now go out and do it!
Upsell or the suds will go flat
Corey has a solid upselling strategy. As he puts it,
Corey quotes everything that needs cleaning, even if the customer didn’t ask for it. He uses this strategy to get more business from the interaction. Forbes.com published a great article on upselling titled, “How to Upsell Any Customer” that tells you how to do it.
Be responsive to customer complaints
If a customer complains, don’t ignore it or, as Austin warns,
Responding promptly to customer concerns and issues is a huge part of earning their trust—and securing those word-of-mouth referrals that can be so crucial in building a client base.
Cleaning is a job that’s never done
So, take advantage of it! Build reservicing into your sales strategy. Of Spruse Clean’s 450 average weekly clients, roughly 40% of them are recurring.
Step 15: Establish repeatable processes
He emphasizes the importance of getting every facet of his business down on paper to build repeatable processes. His clients appreciate the diagram he created to explain his washing process.
As you think through the steps of how to start a cleaning business, first visit Lucidchart.com for awesome guidance on how to document a process.
To recap this guide on how to start a cleaning business, ask yourself the following questions:
- Do I know how to start a house cleaning business?
- Do I know how to start cleaning business offices?
- Do I understand the insurance requirements for commercial cleaning?
- Is it worth it for me to start a cleaning business?
- Will I be comfortable speaking to clients ?
- Am I starting a cleaning business this year?
- Why am I starting a cleaning business?
- Do I need additional help and advice?
- What will I need to feel successful
Take the next step. Now that you know how, start a cleaning business! The truth is, it doesn’t have to be complicated. Austin has a straightforward 3-ingredient recipe for success:
Let us know in the comments below if you have any questions, we’ll be more than happy to help!