According to Backlinko, over a billion hours of YouTube videos are watched each month and successful YouTube channels make $3 to $5 per 1,000 views. If you want to diversify your revenue stream and make some extra cash, you might want to learn how to start a YouTube Channel. We have talked to some of the most successful YouTube (YT) channels to find out how to start a successful YouTube channel. We’ll share advice from: 

• Cameron Anderson: Blacktail Studio makes more than $15K per month with 1.69 million subscribers and more than 100 million views. He teaches woodworking, sells furniture, and sells detailed instructional videos.
• Reyes The Entrepreneur: Reyes’ YT channel makes between $15K to $20K per month talking about profitable side hustles. He has nearly half a million followers and 10 million+ views.
• Serge Belous: UpFlip is one of the fastest growing YouTube channels about starting a business, and I got to pick Serge’s brain about his strategies. We have over 550K subscribers, more than 41 million views and are making $40K to $50K per month with the channel. He’s a private person, so this is a big deal!

We’re going to share their secrets so you can create content that will attract viewers from across the globe and build your authority as a master of your trade. Get ready to learn how to start a YouTube channel and make money.

YouTube Channel Ideas

You’ll need to decide what to talk about before creating a YouTube channel. The YouTube community has successful influencers in every category of content, but some are more profitable than others. A good place to start is by looking at what you’re good at and what you are passionate about. If you own a business, just create video content around your business. There are always opportunities to show what to do and what not to do.  If you don’t own another business, check out some of the video ideas that people watch most.

What is Popular Content on YouTube?

People love watching YouTube content, especially the following categories. If you don’t know what kind of content to create, consider starting a new YT channel about one of these:

• Shorts (under 30 seconds)
• Singing
• Teaching
• Tutorials
• Fashion Advice
• Make-Up Tutorials
• Cooking Videos
• Pet Videos
• Comedy Videos
• Tech Videos
• Product Reviews
• How To Tutorials and Guides
• Video Game Walkthroughs
• Vlogs
• Celebrity Gossips
• Unboxing Videos
• Comedy or Sketch Videos
• Shopping Sprees
• Prank Videos
• Parodies

Next, you’ll want to look at what successful YouTubers are doing to produce quality content.

Research What Leading Influencers Are Doing

You have to create quality content to get enough views to qualify as a YouTube Partner. The best way to do that is to establish what the best content creators are doing.  Serge told us: [su_quote]

1. Find a list of your top competitors by searching subjects in your niche.
2. Use VidIQ to analyze the topic, volume, and keyword difficulty of the competitors.
3. Start with low difficulty and work your way to harder ones.

[/su_quote] Find 40 of the best YT Influencers in this blog by Influencer Market Hub. Pay attention to things like their banners, logos, descriptions, titles, and content length.

Create a Customer Avatar

Create a visual that helps you easily remember who you make the videos for. People watch what they enjoy, so if you upload a video that doesn’t interest your target market, it can hurt your channel and receive negative comments.

Make Your Channel Similar––but Unique

You don’t want to copy what someone else is doing, but you want to take notes on what works and find ways to do something similar. Just make sure to let your personality shine through your work.

Step 1. What Makes a Successful YouTube Channel?

• Be consistent:  Starting a new YouTube channel can be a lot of work. At UpFlip, we have six or more people working on YT to bring you high-quality content.
• Build a community: People tend to be more attracted to communities than content. Plus, most computer algorithms highly prioritize engagement. Always respond to comments to provide more value.
• Make a series of videos: Series tend to do well. Use a trick from many successful TV shows and end each episode with a cliffhanger so the viewers want to know what happens in the next episode.
• Collaborate: Creating videos with other creators helps expose your content to new audiences. Partner up with someone who inspires you. That’s what we did in the video with Blacktail below.

[su_youtube url="https://www.youtube.com/watch?v=DPrnE7MHTRc"] Serge attributes 18,500 new subscribers to this collaboration. 

• Optimize for search: You’ll need to make sure headings, titles, tags, and thumbnails all have keywords that people will search. That means you’ll need a great tool for YouTube SEO.

Next, we’ll walk you through starting a YouTube channel.

Step 2. How to Start a YouTube Channel

Setting up YouTube to be a content creator is a six-step process. You’ll need to:

1. Sign in to YouTube.
2. Create your channel.
3. Name your channel.
4. Add a channel description.
5. Upload a cover photo and profile picture.

How to Make a YouTube Account

The first thing you’ll want to do is sign into your YouTube account if you aren’t already. All you have to do is click on the upper right corner where the “Sign In” Button is.  Next, choose which account you want to use. It expects you to have a Google account. If you have one, input the information. Otherwise, select “use another account” and create an account. Next, input your password (current users) or specify whether the account is a personal or business account. You can find more information about signing up for YouTube on Google Support (YouTube is part of Google). It has directions for desktop, iOS apps, and Android. Next, you’ll want to create a YouTube channel.

How to Create a YouTube Channel

For those wondering how to start a YouTube channel from scratch, you can follow this process:

1. Go to the top right corner and click on the circle for your Google profile.
2. Click “create a channel.”

Next, it will take you to a screen that asks for your name and picture. We’ll discuss that in the next section.

Name Your YouTube Channel

Your new YouTube channel is going to need a name. Do you already have a business name? If so, just use that. If not, think of a name for it. For mine, I’m calling it BB’s Vegas Adventures because I’m getting a GoPro and going to start recording the mischief I get into. The picture below shows the screen. I also uploaded a picture. Mine is silly, but for most people, you’ll want a headshot or a business logo. I’ll describe that more next.

Upload a Profile Picture and Cover Photo

Remember to add a profile picture before you click “Create Channel.”  The photo should be no more than 800 x 800-pixel png, jpeg, or gif (no animations). Check out some of the easy YouTube Photo makers to find one that you like. Here are the photos Reyes The Entrepreneur, UpFlip, and Blacktail Studio use.  After you’ve uploaded your profile picture, click the “Create YouTube Channel” button. It will take you to a screen that looks like the picture below. To edit your banner image, click “Customize Channel” and it will take you to the YouTube Studio. This is where the magic happens. You can adjust the: [su_note note_color="#dbeafc"]

1. Layout
2. Branding
3. Basic information

[/su_note]

Layout

The layout has places to add:

• A channel trailer for non-subscribers
• Featured video for returning subscribers
• Up to 12 Sections

I’ve included a screen recording from Reyes The Entrepreneur channel where he uses both the featured video and 10 sections. Check it out below: [su_youtube url="https://youtu.be/o8YsUONYLw4"]

Branding

The YT Studio Branding tab includes the ability to edit:

• Your profile picture: The image should be square, bigger than 98 x 98 pixels, less than 4 MB, and png or actionless gif.
• The banner image: The image needs to be a minimum 2048 (long) x 1152 (high) pixels and no more than 6 MB.
• The watermark: This will go in videos. It should be 150 x 150 pixels and less than 1 MB. Acceptable files are: PNG, JPEG, GIF (no animations), or BMP.

You’ll want to change the banner image in this section. Check out the three brand banners below. Each takes a different approach but includes the same information: the name of the company and their social media. Notice that UpFlip adds the time we post and our mission in the banner. That helps subscribers know what to expect and when to check it. Which do you like best? You might also want to add a watermark to your YT videos. Check out two ways to watermark YT videos.

Add a Channel Description

Next, go to the “Basic Info” tab to add a description, which includes:

• A place to change the channel name: Be careful about this because you’ll have to update your branding.
• The description box: It allows a maximum of 1,000 characters. Make sure to do keyword research before writing your description. Keep your keyword density around 1% or 2% to avoid penalties for keyword stuffing. We’ll discuss tools to help with this later in the blog.
• Links that will be shared with your viewers: Add social media, websites, blogs, etc. You can choose to include the first five links in the banner, so organize them well.
• Contact Info: Include an email that can be shared publicly with viewers.

The picture below shows the page for you to add a description of your channel. The description will show in the section about the channel. The most detailed of the three sections is UpFlip’s. It tells what we do and includes the keywords:

• Businesses
• Aspiring entrepreneurs
• Business secrets
• Interviews
• CEOs
• Entrepreneurs
• Business owners
• Your own business
• Own a company

Then shares information on how to be featured, how to find our services, and how to reach out for sponsorship opportunities. You can see the “About” section of the channel below: YouTube channels for kids and YouTube channels for gaming have some specific requirements we need to cover.

How to Start a Kids YouTube Channel

If a younger child wants to start a YouTube channel, you’ll need to assist them because the YouTube kid policies require users to be at least 13 years old, unless they are under a family account. Monetization requires someone to be over 18, and you must follow all local laws. Make sure to review the content policies if you plan to market to kids. Paid product placements are specifically excluded from the YouTube Kids app. Here’s a kid's book on starting a YouTube channel. Make it fun for your whole family: NEED A LINK

How to Start a Gaming YouTube Channel

Gamers share tips and tricks with people on YouTube frequently. YouTube policies specifically mention how to make a YouTube channel for gamers in several sections including the monetization and copyright sections. Check out the list of resources for gaming YouTube videos. Next, it’s time to create your first video.

Step 3. Create Your First YouTube Video

Creating new videos will require: [su_note note_color="#dbeafc"]

1. Getting your equipment
2. Writing a script
3. Recording the videos
4. Editing the videos

[/su_note] Let’s start by looking at the equipment you’ll need before creating your first video.

Get Your Tools

You’ll need to have video equipment, software, and other tools before you can post your first video on your new channel. YouTube channels will typically want to have the following tools to produce quality content:

• Camera (cell phone is okay at first)
• Microphone(s)
• Laptop
• Photo and video editing software
• YouTube & Search Engine Keyword Planner
• Social Blade, analytics software
• Other social media accounts

Camera and Accessories

Cameron told us: [su_quote] I got to over 700,000 subs with my iPhone. So, it's not about the cameras and all that type of stuff. Just, you know, listening to the analytics, listening to the audience, and making good content. [/su_quote] Meanwhile, Reyes told us: [su_quote] I started with a $50 camera. I upgraded after a while and bought a $200 camera, but I’ve never bought fancy equipment.[/su_quote] You’ll need a camera and accessories for content creation. You can make videos for your own YouTube Channel on a phone or with a computer’s internal webcam, microphone, and the lighting in the space you are recording. That might cause bad audio or video, plus it could require a lot of work in post-production. To make videos that are easy to watch, there are a few ways to go about choosing the right equipment. [su_table responsive="yes" alternate="no" fixed="yes"]

	Phone	GoPro	Desktop/Gaming	DSLR	Mirrorless
Best for	Before Earning Revenue	Point of View Videos, Sports, Music Festivals	Software Reviews, Gaming Tutorials, Videos without much Movement	Will Work for Most Types of Video, Discourage Use for Sports, and Events That Require Press Packages To Shoot With Removable Lenses	Will Work for Most Types of Video, Discourage Use for Sports, and Events That Require Press Packages To Shoot With Removable Lenses
Camera	Included on phone	GoPro Hero10 Black	Logitech Brio 4k Webcam	Nikon D850 Video Kit	Sony A7iii Package
Backup Camera	N/A		Onscreen Broadcast (OBS) Screen Recording	Nikon D850	Lumix G5 Video Package
Lighting	Selfie Ring Light	GoPro Lighting ( Connects with Media Mod)	Lightring	Included with Kit
Microphones		Media Mod	LogiTech Blue Yeti Mic	Included with Kit	Wireless Lavalier Microphone
Lenses	Phone Camera Lens Kit	GoPro Max Lense Mod	N/A	Included with Kit	Varies Based on Use Case
Extra Grip	Grip for Phone	Choose Based on Use Case	N/A	Included with Kit	Ronin S Gimbal
Extra Battery		Included With Camera Link	N/A	Included with Kit	Included in the Packages

[/su_table]

Microphone(s)

I would suggest trying your built-in microphone to see if you are satisfied with it first. If you have poor audio There are a ton of different options for mics, but they typically fall into the following categories:

• Wireless single-direction lapel microphone system: Best for presentations where you need to catch your voice while you are in motion.
• Cardioid microphone: Great for live music, interviews, streaming, gaming, and more. There are different types, so research which one is best for your needs.
• Shotgun microphone: Best with DSLR cameras. If you are shooting with a DSLR, consider this type of mic.

Check out this list of 40 sites that help people choose the right mic.  Let’s discuss laptops next.

Laptop

YouTube creators use a lot of software that works best on a computer. While you can use a cell phone or tablet, the desktop version works better. Because of that, you might want to buy a laptop. When doing any kind of video or photo editing, you’ll want to consider:

1. Quality of the screen: Apple Products tend to stay true to color best, but there are screen calibration tools you can use.
2. Storage space: 1TB+ SSD
3. RAM: Typically 16 or 32 GB
4. Video card: 6-8 GB
5. Software specifications: Check the video editing software you’ll be using.

For instance, here are the specs for Adobe Premiere Pro. Adobe has some of the more resource-intensive requirements for software, so if your computer meets their specs, you might be okay. I have had some success buying computers from Amazon Open-Box Deals for drastically reduced prices. You can skip a more powerful computer if you plan on hiring a video editor to help with your new channel. Next, we’ll look at the photo and video editing software you’ll need when starting a YouTube channel.

Photo & Video Editing Software

If you plan to edit videos yourself, you’ll need post-production software for making videos. At UpFlip, we hired an editor for our video content but specified the requirements for the post-production process. Some popular video editing software includes:

• Adobe Products
• DaVinci Resolve
• CyberLink PowerDirector 

Check out PCMag reviews on editing software.

YouTube Keyword Planner & Analytics Software

YouTube analytics tools help you plan content for your YouTube channel, analyze competitor channels, and monitor how your videos are performing on YouTube. This is a must-have when starting a YouTube channel. Check out these tools:

• Social Blade: Recommended by some YouTubers
• VidIQ: Preferred by UpFlip
• Ahrefs: Used for writing and search engines but also has YouTube utilization

Script

Depending on what kind of a channel you are creating, you might want to have a script. UpFlip writes several intros and a list of 40 questions to ask the business owner. We also use a guide that specifies what we have found the viewers enjoy watching and what loses the audience. Cameron told us one of the best suggestions he’s ever heard is to come up with the title and thumbnail first and work from there. That’s especially helpful if you are learning how to start a YouTube channel. For Beginners, you’ll want to simplify the process as much as possible. I definitely think it helps to start with the SEO emphasis and go on to create the rest of the content. I’d suggest looking on Google Trends for the top searches on a topic before you start making videos.

Record

Cameron told us: [su_quote] I just make a video of the build process. Originally, I just did videos on what I was working on at the time. Now, I'm trying to branch out a little bit more. I'm trying to not make the same video 30 times. [/su_quote] UpFlip focuses on providing content the audience wants to watch. We try to keep our answers under 60 seconds, but we focus on creating longer videos because we find it helps with the metrics:

• Watch time: Total monthly hours viewers spend watching our channel
• Average view duration: Watch time of each video divided by the number of viewers
• Clickthrough rate (CTR): People who watch the video divided by the people who were shown the video in search or through or other means

Don’t forget to record several intros and calls-to-action. Remember to ask them to subscribe to your channel, but always wait until after you really add value for your audience. They are more likely to hit the subscribe button then.

Edit Your YouTube Videos

This is a more advanced skill set for YouTube channels. At first, just focus on making useful videos. If you decide to edit them, outsource them. Both Reyes and UpFlip hire freelancers. We prefer using Upwork for our freelancing. Cameron specifically advises cutting out all wasted space. When he sands a new table, he only includes enough to say, ”Next, you want to sand the table.” No one wants to watch a video where someone sands a table for 30 minutes. You’d lose your audience. Keep it to two seconds.

Step 4. Post Content

Now that you have an edited video, you’re just a few clicks away from beginning your YouTube journey. You can post new content from the mobile or desktop app. Just look for the “+” icon in mobile or the camera icon on the desktop app. Mobile and desktop go through slightly different processes. I created a video on how to post a youtube video from your phone. Check it out below: [su_youtube url="https://www.youtube.com/watch?v=fgOeCFktJmk"] The desktop app allows a lot more functionality. When you’re ready to start uploading videos, you’ll want to fill out the following sections:

• Title: The title is one of the first things people will see. It is also one of the primary factors that impact SEO and visibility. It should include the target keyword or a variation of it. Titles are best at 70 -100 characters.
• Thumbnail: The thumbnail is the cover photo for the video. Under 50 characters works best and A/B testing should be used to determine which works best on YouTube.
• Description: The video description should start by telling the viewers what they are going to see in the first 200 characters, then include other information that further explains the video like links and  timestamps. Include relevant keywords and mention any sponsored content.
• Music copyright information: Each YouTube channel needs to create unique content. If the AI detects copyrighted material, it will flag the content and give the revenue to the copyright owner. To avoid this, carefully review YouTube’s copyright terms and conditions.
• Make your video shareable: Only public videos will be eligible for revenue and the more shares you have, the more people who can see it. Make sure to allow and encourage sharing of your YouTube content.
• Allow comments: Algorithms use comments to establish whether people are interested in the material. The more meaningful engagement, the better the channel is likely to do among the target audience.
• Relevant tags and hashtags: Hashtags in a description are a great way to see how your video is doing. They also help viewers find other videos on similar subjects. Check out this example for #cleaningbusiness. Meanwhile, tags are the basic building blocks for how YouTube indexes your video. Include all meaningful searches that you want your video to come up during. There is a maximum of 500 characters in the tag box, and only three tags can be shown above the title of the video.

Example: If this blog were a YouTube video, I would use the following: [su_table responsive="yes" alternate="no" fixed="yes"]

Tags	Hashtags
How to start a youtube channel	#HowToStartAYouTubeChannel
How to start a youtube channel for beginners	#CreateAYouTubeChannel
how to start a youtube channel and make money	#StartingAYouTubeChannel
How to start a youtube channel for kids
How to start a successful youtube channel
How to start a gaming youtube channel
How to start a youtube channel from scratch
Starting a youtube channel
How to make youtube channel
Create youtube channel

[/su_table] Follow other YouTubers in your niche to establish what they are doing well and how you can add more value for your target audience. Creating content is all about which channels satisfy their audiences’ needs best.

Step 5. Share to Social Media

Sharing to social media can be as simple as posting the link and a description about the YouTube videos, or you can upload videos that are teaser clips for your YouTube videos. Cameron told us: [su_quote] What most YouTube creators do is they use that content, and they chop that up and repurpose it on Instagram, Facebook, and places like that. [/su_quote] Meanwhile, UpFlip approaches sharing the YouTube Channel on Instagram, by posting the thumbnail and a description, then linking to the YouTube in the profile. Serge told us:  [su_quote] I would also highly suggest joining relevant Facebook communities and posting your videos there, NOT to spam, but to add value. [/su_quote]

Respond to Comments

Cameron loves responding to comments. He told us: [su_quote] It's a focus group. People spend millions and millions of dollars on focus groups, you know, these big businesses, and this is my focus group. [/su_quote] Your YouTube journey is a learning opportunity. If you get positive comments, thank them and note that the audience appreciated certain things. If you get negative comments, try to help satisfy your audience and learn about what they didn’t like. Both scenarios are a chance to connect with new viewers and gain insight into what people expect. We asked Serge about comments, and he told us: [su_quote] Reply to comments that come in within the first 24 to 48 hours of your video going live. This allows you to cultivate an active community. [/su_quote] Serge went on to discuss how to use comments in Facebook groups: [su_quote] Always try to add value, otherwise you'll be quickly banned, that's what we did starting out. If someone has a question about starting a type of business, we'll answer their question and suggest watching our video. [/su_quote] Let’s look at ways to optimize your channel and content after you upload a video.

Step 6. Optimize and Grow

There are a ton of ways to optimize your content after you upload a video, including:

• Create formulas
• Study YouTube Analytics
• Buy YouTube ads 
• Use other ad platforms
• Improve SEO
• Use the Community tab to improve engagement.

Serge told us:  [su_quote] I would also highly suggest joining relevant Facebook communities and posting your videos there, NOT to spam, but to add value. [/su_quote] We’ll discuss each.

Create a Formula with Templates 

You can create elements in YouTube Studio to make end screens and cards easy to add to your videos. If you find that one template gets people to subscribe better than another, add it to other videos.

YouTube Analytics

Use YouTube Analytics to establish: [su_note note_color="#dbeafc"]

• Best and worst performing videos
• Average view duration of each video
• Traffic source 
• Type of device
• CTR

[/su_note] Learn about the expanded analytics reports to find your gems.  Cameron told us: [su_quote] I'm a sucker for YouTube analytics. I do AB testing of thumbnails and titles, and it has made a massive difference in the success of my videos. I know you guys do a little bit of that too. [/su_quote] Serge agrees but suggests using additional software. He told us: [su_quote]Master your thumbnails. It's crucial if you want to be over 10% CTR, which is very hard to do. Our average CTR is above 5%, and we still have a long way to go. Your thumbnail should convey just one idea. Use vivid colors. Test different thumbnails by using the TubeBuddy feature. Make them curious. Your thumbnails should tell a story, it should be simple, bright, and contrastive. You need to stand out from the rest. [/su_quote]

YouTube Ads

If you really want to speed up the process, you can use paid ads on YouTube to connect with potential viewers. This is a high-cost way of getting viewers, but it can pay off if you are confident that your content is amazing. You’ll be spending around $2,000 for 100,000 ad views though.

Other Ads

You can also use ads on social media, Google, or Bing, but all of these are highly saturated, and you might spend a lot of money. Most truly successful YouTubers focus on SEO and engagement to help YouTube start generating revenue.

SEO Optimization

This is the aspect that all of the people we interviewed agree makes a huge difference. YouTube is actually considered a search engine, so anything you know about optimizing for Google, should apply to YouTube. That doesn’t mean it will be the exact same, though. There are three ways to get organic traffic from YouTube internally:

1. Search: Uses search engine optimization. You’ll want to focus on this method when you first start.
2. Browse: Helps improve the visibility of your videos in the browsing functions of YouTube based on hashtags, tags, and other indicators.
3. Suggested: Helps to improve rankings in suggested videos.

Serge told us: [su_quote] We’re not focusing on “search” traffic but on “browse” and “suggested,” but the only way this would work is if you have high retention and high CTR. [/su_quote] He also suggested checking out these videos to learn more about how YouTube works:

• vidIQ Academy: Free with VidIQ (some require Pro or Boost Plan)
• Ed's Film School: Paid, but I am confident that when Serge says it’s worth the money, that it is. 
• How to Use vidIQ: The Complete Guide!: Free with VidIQ (some require Pro or Boost Plan)

Community Tab

All three of our featured YouTube channels use the community tab. This is where you can share surveys, other posts, and announcements. Each takes a different approach. Check out the overview of each below: [su_table responsive="yes" alternate="no" fixed="yes"]

Blacktail Studio	UpFlip	Reyes The Entrepreneur
Posts about once per month	Posts most days	Posts daily
Gathers AMA questions	2–3 surveys per week	Mostly sharing videos
Shares goals and requests help	Shares podcasts & blogs	Low comment volume
High volume comments on each	Giveaways	Seems this aspect is an afterthought
	Volume of comments varies, but monthly comments exceed Blacktail
	Encourages discussions

[/su_table]

Step 7. How to Start a YouTube Channel and Make Money

You’re here because you want to know how to start a YouTube channel and get paid. Good news! There are a lot of ways to make money on YouTube. The most common ways to earn revenue on YouTube are:

1. Affiliate Marketing: Refer people to products you love and get a commission. Some you can start immediately.
2. Outbound Links to Websites: Send people to your website to purchase products and services. Some features are available when you start your YouTube account, but there are YouTube Partner features as well.
3. Sponsorships: Add in paid promos and get paid for marketing to your subscribers. 
4. Become a YouTube Partner: Meet YouTube's 4,000 hours of watch time and 1,000 subscribers requirements, plus some other guidelines. Follow the monetization process in the link above.

Cameron told us: [su_quote] They always say to diversify your investments, but nobody talks about diversifying your income. You lose your job, you lose 100% of your income. [/su_quote] Reyes told us: [su_quote] YouTube is between $7 and $10 thousand, affiliate links are $2 to $5 thousand, and the new one, sponsorships are $1 to $5K. [/su_quote] Take his advice and keep reading about the different ways to make money on YouTube.

Affiliate Marketing

One of the ways that any successful YouTube channel will make money is through affiliate marketing. In your videos, you might use a tool or mention software that you find useful. If you are using it, your viewers will probably want to know where to get it. So provide them an affiliate link that makes it easy for them to buy the product and earns you between 1% and 25% commission. Cameron used to be nervous about using affiliate links, but he learned it saves him time and his audience appreciates it. He told us: [su_quote] They don't see it as an ad. They see it as a service. [/su_quote] Reyes loves his affiliate links. Check out all of the ones in one of his top YouTube videos. At UpFlip, we limit the number of affiliate links we use to only the essentials. Many videos only include the link to our sponsor as paid promotion, but we typically include around seven affiliate links in the blogs. There are eight main affiliate marketing websites you should join, but if you search “company name affiliate” you can normally quickly find where to apply easily.

Outbound Links to Website

Always link your YouTube Channels to your website and other similar videos you think your audience will appreciate. You’ll want to include links in several places like:

1. Your banner
2. Your channel’s “about” section
3. At the end of each video
4. In each video’s description
   1. Social links
   2. Home Page
   3. Relevant Content

Check out our interview with Reyes for more great information on how to make a YouTube video. [su_youtube url="https://www.youtube.com/watch?v=Dg-ymfCpYcQ&t=128s"]

Sponsorships

Cameron gave us some great advice about sponsorships: [su_quote] (Be) careful about the sponsors you take. I took a shady sponsor…my views and everything just tanked.  It took me like a year to get back to where I was. [/su_quote] As you can tell, we take this to heart and only accept sponsors and partnerships that are highly rated, business-oriented, and useful for YouTube video viewers. Make sure to review YouTube’s sponsorship guidelines. You can’t accept these if you want to be in the YouTube kids app.

How to Charge YouTube Video Sponsors

The industry uses CPM to charge for sponsorships. First, find the average views for your last 10 videos and divide by 10. Next, multiply the views by twice your Cost per 1,000 Impressions (CPM). The industry standard formula will work like the following example:

• Average View Count: 218K
• Average CPM: $33.18  

During the early stages of acquiring sponsorships, you can multiply the CPM by 1.5  in Step 2 to give companies more incentive to invest in sponsoring you.

Become a YouTube Partner

This is where a lot of the real money from YouTube channels gets generated. When you become a YouTube Partner, a lot of opportunities open up that smaller channels don’t have. We’ll share the requirements to become a YouTube Partner, how to opt-in for monetization, and the Partner money making tools that are only available once you opt in.

Requirements

There are six requirements to be an eligible YouTube Partner Channel. They are:

1. Follow the monetization rules
2. Live in an eligible country
3. No active strikes on your YouTube account
4. 1,000 subscribers
5. 4,000 public watch hours
6. Linked AdSense Account

As long as you meet these requirements you get to join the YouTube community that gets paid for creating videos, but you have to actually apply if you want your YouTube channel to participate.

Opt-In

To opt-in and make money off the ads your viewers watch, you have to add 2-Step verification to your Google account (if you haven’t already). Next, go to the monetization tab in YouTube Studio. It will tell you if you’re eligible. If you aren’t, you can ask for an email notification when you are. Go ahead and ask it to notify you while you’re familiarizing yourself with starting a YouTube channel.   You’ll also need an Adsense account. Go ahead and get an Adsense account if you don’t have one. Your YouTube channel will automatically go into the queue when you’ve met all the requirements. Let’s look at the ways YouTube Partners can make money on the platform.

Options

Once your YouTube journey reaches this stage, you should have figured out how to create video content that people will watch. So YouTube gives you a lot of ways to earn more from your video including: [su_note note_color="#dbeafc"]

• YouTube Ads 
• Channel Memberships
• Merchandise
• Super Stickers and Super Chat
• YouTube Premium
• YouTube Short Funds

[/su_note] Let’s look at how you make money with each of these.

YouTube Ads 

YouTube shares a percentage of ad revenue with the Partners making videos. Most content creators will receive somewhere between $3 and $5 per thousand views (CPM) depending on the number of ads watched during channel videos. That's why longer videos are so important. Serge told us: [su_quote] Our average CPM is $29. [/su_quote] That’s six times the average. Keep reading because we’re going to share a secret that hurts other creators’ CPM.

Channel Memberships

Content creators can offer memberships to their audience like:

• Contests and giveaways
• 1-on-1 meetings
• Member-only videos

These increase excitement and reward the audience for being loyal viewers of their YouTube videos. Check out more about the memberships. 

Merchandise

You can sell merchandise through YouTube videos without becoming a partner, but you have to send them off-site. As a YouTube partner, your channel can sell your merchandise directly on YouTube! The bar is a little higher, but it can be an easy way to provide products seen in your videos. You’ll need 10K subscribers before you can connect shopping items directly in your YouTube videos. You can even have different products in Your channel store and video store. Find out more.

Super Stickers and Super Chat

A content creator can allow super stickers on their videos. This can be a great tool combined with sponsored content because Super Stickers allow the audience to pay to pin their comment on the top of the thread. If your sponsor wants to guarantee their comment is seen, they can renew it as needed. Plus you get 70% of revenue from the Super Stickers. Check out the YouTube guide on stickers.

YouTube Premium Revenue Share

Partners share a percentage of the Premium memberships, too. It helps increase your view time, plus they can download your content to listen to or view it anywhere. All partners share a percentage of the revenue based on their total view time. So if your audience pays for YouTube Premium, don’t forget to remind them to download your videos so they can listen to them on road trips. Here are the details on YT Premium. If you create content that is really short, you’ll love the YouTube Channel ideas to make money on short clips.

YouTube Short Funds

Starting a YouTube Channel can be a lot of fun. If your audience is for funny videos, you can submit YouTube shorts. This is a chance to reach an audience similar to TikTok’s audience. You just upload a video under 30 seconds from your phone and it qualifies for revenue from the $100 million shorts fund. Learn more about shorts. These are great for a new channel or a video channel that has a low retention rate, but Serge warns against these if your channel is doing really well. Here's what he has to say: [su_quote] I don't believe in this strategy. I know a few of big business channels that are big on shorts and they get millions of views, but they attract a random audience that destroys their retention rate. Their actual long form videos get a fraction of the views (that we do) and they don't even make 1/3rd of what we do with our channel. They're big on TikTok videos as well.  Our goal is to attract the right audience, an audience that will watch and interact with everything that we put out. What's the point of having 2M subs and getting a fraction of views as most channels this size get? [/su_quote]

What Success on YouTube Looks Like

Everyone has different ways they approach their channel. From channel art to asking people to subscribe, plan ahead when you create your first video. It doesn’t matter if you have a camera or phone with bad audio. Hit the upload button and start finding new viewers today.  As you grow, you can invest in audio and video equipment. But like Reyes The Entrepreneur said: [su_quote] Why buy a new camera? If it’s not broken, don’t fix it. [/su_quote] What aspects of audio and video recordings for YouTube would you like to hear more about?

Professional house cleaning is a major industry. The global cleaning industry is currently valued at over $55 billion, and that’s expected to double by 2030. That means it's a great market for new entrants, but you'll need a house cleaning pricing guide to make sure you charge properly, which is exactly what we provide here.

[su_note note_color="#dbeafc"] Read from start to finish or click any of the links below to jump to the section you need right now.

• Case study: Queen Bee Cleaning
• How much to charge for cleaning a house
• What kind of house cleaning services should I provide?
• Ways to charge for professional house cleaning
• Sign up for our exclusive 7-Figure Cleaning Business Blueprint[/su_note]

Case study: Queen Bee Cleaning

Chris Mondragon’s wife started cleaning houses in 2015 to make some extra money. Their company, Queen Bee Cleaning, took off so quickly Chris quit his job and helped build it into a $1.5 million empire. Today, Queen Bee is also top-rated on Nextdoor, Yelp, Houzz, Thumbtack, HomeAdvisor, and Porch.

We'll share Chris’s insights to help you create a cleaning pricing guide that will allow you to make a great living in the house cleaning services industry. We'll cover the types of services and different ways to charge—and share a pricing list.

Keep reading for a rare opportunity to learn Chris's unique pricing strategies from his UpFlip-exclusive course. You'll discover exactly how he prices his cleaning services, which skyrocketed the growth of his business to $4.5M in record time.

How much to charge for cleaning a house

House cleaning prices for a home should be between $100 and $800, but each house cleaning service will have different prices depending on the size of the home, the type of cleaning, and where you live.

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

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

Now that you know how much to clean a home, let’s discuss the different kinds of house cleaning services.

What kind of house cleaning services should I provide?

A housecleaning service will normally offer other services besides just cleaning homes for people who live in them. They may also provide services for Airbnbs, moving, apartments, and commercial spaces. For instance, Queen Bee also offers:

1. Airbnb cleaning
2. Carpet cleaning
3. Disinfecting services
4. Home cleaning
5. Move-in cleaning
6. Deep cleaning
7. Move-out cleaning
8. Office and commercial cleaning

Chris told us:

[su_quote]If I was to start today, I would probably focus on Airbnb cleaning because it has a higher profit margin.[/su_quote]

For standard house cleaning services, Queen Bee includes:

• Dusting all furniture, walls, fans, counters, and other hard surfaces
• Vacuuming all floors
• Mopping wood, marble, tile, and linoleum floors
• Mirror and window cleaning with a glass cleaner
• Cleaning and sanitizing all bathroom surfaces including toilets, sinks, tubs, and showers
• Sanitizing all kitchen surfaces including inside the microwave and the front of the fridge
• Spot-cleaning cabinets
• Changing linens (if fresh linens are left out) and making beds
• Emptying the trash and relining the trash can before exiting each room

These are just some of the house cleaning services Queen Bee offers. You can find Chris’s complete cleaning services checklist, including 11 add-ons, in our Cleaning Business Master Course.

Let's look at what you might offer as the owner of your own house cleaning business, starting with Airbnb cleaning.

What should I include in Airbnb cleaning services?

In addition to your standard offerings as a house cleaning service, Chris suggests maintaining an inventory of your own supplies to replace toiletries, kitchen essentials, and linens. For the laundry portion, you'll need to have someone do laundry or partner with a laundry service.

He also told us:

[su_quote]I charge extra for the toiletries and linens, but it basically takes me the same time as a normal home clean.[/su_quote]

Check out our interview with Chris below:

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

What should I include in carpet cleaning services?

Carpet cleaning services focus only on rugs, carpets, and other floorings. You'll need to assess your time differently from other services and have the special cleaning equipment to do the job best.

Chris shared his cleaning pricing guide for carpet cleaning, and it includes five main cleaning points with time and price for:

1. Rooms
2. Hallways
3. Landings
4. Each stair
5. Rugs

It's typical for a carpet cleaning business to have a minimum amount, such as $99 for two bedrooms.

What should I include in disinfecting services?

Disinfecting services are focused on cleaning surfaces with medical-grade cleaning products. The goal here is on keeping the space particularly clean in a way that helps to minimize germs. I would imagine this is popular for businesses or households that have had a COVID outbreak.

Christ told us:

[su_quote]Eliminating germs & pathogens requires more than just a wipe of a towel with bleach. We use an electrostatic sprayer to apply the disinfectant. The sprayer ‘loads’ the mist with a positive charge, making the disinfectant stick to all surfaces killing 99% of the pathogens. Our hospital-grade disinfectant is an EPA-certified product safe to use around children and pets [that’s] safe on all surfaces.[/su_quote]

What should I include in deep cleaning services?

Deep cleaning services should include everything you do in standard house cleaning, plus baseboards and behind furniture. Chris also includes dishes in his standard deep clean service and offers a variety of additional offerings.

How much does a deep clean cost?

Deep cleaning services are normally charged at a premium compared to a standard cleaning price. For Queen Bee clients, deep house cleaning costs between $199 and $319 above the standard house cleaning prices.

So, once you know how much you'll charge for regular services, it's easy to decide how much to charge for deep cleaning a house.

What should I include in a move-out cleaning service?

Move-out cleaning is a service offered to renters to help them save time and money by helping them get their deposits back. These services include:

• Thoroughly cleaning all counters, cabinets, and appliances
• Cleaning bathrooms, including toilets, sinks, and showers
• Cleaning floors and carpets
• Wiping down light switches, walls, and doorknobs
• Disposing of any expired food items
• Deep-cleaning the oven

Chris recommends using the move-out checklist provided by the client's landlord as the basis for bidding on the cleaning job and told us:

[su_quote]I charge $279 to $479 more for move-out cleaning costs than my standard cleaning rates.[/su_quote]

Want more great tips like this? Check out all of our UpFlip courses.

What should I include in office and commercial cleaning?

Offices and commercial cleaning jobs are different for every building. Chris recommends touring the property and establishing the following:

• Square footage
• Number of desks
• Percent of floors that are carpet and tile
• Number of windows
• Number of toilets and sinks
• Square footage of counters
• Kitchens in the building
• Parking lots
• Special requirements

These jobs can be more complex, but businesses need more routine cleaning services, which could be a win for you. Commercial buildings also tend to be better suited for pricing per square foot because you can assign a price per square foot to each task and then just multiply quantities. It might look like the table below. (Note that sqft = square feet.)

Task	Quantity	Price Per Task	Total
Carpet (sqft)	6,000	.1	$600
Tile (sqft)	10,000	.2	$2,000
Desks	60	1	$60
Windows	600	.1	$60
Toilets	50	5	$250
Sinks	10	2	$20
Kitchens	2	10	$20
Counters (sqft)	100	.1	$10
Parking lots (sqft)	50,000	0.2	$1,000
Special Requirements	N/A	0	0
Total			$4,020

House cleaning prices vs. operating costs

Every cleaning company will have costs associated with operating. One powerful difference between a successful cleaning business and other cleaning companies is how well the business owner manages their cleaning costs. Your house cleaning prices need to cover the following expenses:

1. Payroll expenses, taxes
2. Marketing costs
3. Cleaning supplies
4. Fuel
5. Repairs
6. Rent
7. Utilities
8. Professional fees

Based on Queen Bee Cleaning Service's annual expenses, you might expect your total overhead costs to be approximately 87% of the amount that you make if you have employees. If you are a single-person house cleaner, the total overhead will be between 30% and 50%.

In the following sections, we share a few examples. You can use similar math regardless of what type of cleaning business you run. Queen Bee is primarily house cleaning, so I refer to house cleaners in these sections.

Let's look at each of these to give you an idea of what they are for Queen Bee and what you can expect to pay when you start to charge for housecleaning.

How labor impacts house cleaning prices

Labor typically accounts for approximately 50% of the costs of running a house cleaning company. Whether this amount is going to you or your employees will vary. If you have employees, you'll typically need to pay them either an hourly rate or billable hours.

Just make sure you don't try to consider them independent contractors. Chris told us:

[su_quote]I was misclassifying the maids and got a hefty fine.[/su_quote]

To help establish an hourly rate, check what house cleaning companies in your area pay their housekeepers. The Bureau of Labor Statistics has a lot of data on the hourly rate of the house cleaning industry, too. In most places, a house cleaner will be paid an hourly rate of $15 or more.

Remember to train your staff well because employee efficiency can impact both quality and overhead.

Assuming the following:

• Employee pay: $15 per hour
• Employee hourly rate, revenue: 50%
• Number of people on cleaning crew: Two

You'll want to charge the customer no less than $60 per hour. That is far lower than the cleaning rates for many house cleaning companies. The reason is that a house cleaner has other costs that go into the standard cleaning fees.

Payroll expenses, taxes

On top of employee pay, your house cleaning price will also need to cover the costs of payroll expenses and taxes. The government requires employers to collect:

• Income taxes: You'll need to withhold these for all employees using the information in Publication 15-T.
• Payroll taxes: The employee pays 7.65%, and the employer pays 7.65%.
• State taxes: There are seven states without income taxes. You'll have to collect these from employee pay unless you live in Alaska, Florida, Nevada, South Dakota, Texas, Washington, or Wyoming.
• Other deductions: Insurance, 401K, etc., will be deducted if you offer them.

There are a lot of tasks associated with compliance, so you may want to outsource your human resources. Most of these services start around $39 per month plus $6 per month for each employee.

The 7.65% tax increases the $60 per hour fee to $65 per hour, which is starting to get closer to the cleaning rates of industry leader Molly Maid, which charges $75 to $96 per hour for a basic cleaning package.

Your revenue will also need to cover other costs such as cleaning supplies, which we'll discuss next.

Cleaning supplies

Based on standard cleaning services, you'll probably need to spend an average of $3 to $5 per hour on cleaning supplies. You'll be buying these in bulk to save money, but Chris estimates that the supply list for many cleaning companies will be around $900 for startup costs.

That means a rate of $70 per hour, which gets us even closer to the price your house cleaning service needs to charge.

Vehicle, fuel, insurance, and repairs

Local businesses will have to drive to provide weekly cleaning to residential and commercial clients. That means you'll need to maintain the vehicle and meet insurance requirements. At Queen Bee, these costs are approximately 17% of the revenue.

This is why your credit score is so important to businesses. Bankrate estimates that insurance costs 25% more for an average credit score than excellent credit, and those with poor credit spend twice as much as any other group.

If you add 17% to the $70 cleaning crew rate, that brings you to $81.9 per hour—without any administrative costs, marketing costs, rent, or other utilities.

Marketing and administration costs

The Small Business Administration advises spending 5% to 15% of your desired revenue on marketing your cleaning business (or any other business). Chris doesn't think you need to spend that much, though

If you have good software, you can automate many of your tasks and reduce the final cost of operating. Chris runs his marketing for between 2.4% and 6.2% of revenue per month, with the lower percentages during the holidays.

Pro Tip: To learn some of the ways Chris uses marketing, check out our blog on getting clients, and don’t miss our original report on small business marketing budget statistics that will help you make the most of your marketing spend.

Rent

Chris’s rent and utilities are based on running a home-based business. These are marvelous because they are mostly legal accounting maneuvers. If you store supplies in your home or do office work out of it, you can claim the space you use and the energy associated with it on your taxes.

There are a lot of rules governing this, but if you choose the simplified method of claiming, you get an allowance of up to $1,500 a year. If use your the actual expenses, it can go higher (but may increase the chances of an audit). You'll want to measure the square footage of the space used.

You don't have to include the costs of operating from home in your house cleaning cost, but if you do, it will raise the hourly rate by about $1 per hour.

Utilities

If you have a home-based business, you'll be using the energy associated with work as a write-off, but if you have a separate location where you store everything, you'll need to cover those costs.

Utilities shouldn't be too much unless your cleaning business does a lot of laundry or manufacturing in-house. To give you an idea, Chris only spends about $300 per month on utilities.

Professional fees

Local companies will often need a lawyer and an accountant to help them structure their domestic services correctly. You'll want to budget for these. Chris assumes approximately $1,000 per month for his cleaning company, but different cleaning services will have different needs.

Ways to charge for professional house cleaning

There are a variety of ways to charge for a cleaning service. We'll cover the most common pricing strategies cleaning businesses use, including:

• Charging by the hour
• Pricing per square foot
• Pricing per room
• Comparing house cleaning prices in your area
• Offering weekly cleaning subscriptions with discounts
• Proposing household chores as add-ons
• Giving free estimates

How much to charge for house cleaning per hour

The hourly rate for house cleaning is the easiest pricing structure to use, but it can create fluctuations in costs based on how long it takes to clean the property. This works best if the client provides all the cleaning supplies and just needs someone to help. You might want to do this if a client wants specific eco-friendly or other specific cleaning supplies.

You'll probably want to charge higher for the first hour. I typically assume that it will cost me $50 just to drive somewhere. Based on Queen Bee's pricing guide, Chris has established that cleaning services prices should be approximately $70 for the travel costs and booking fees.

To calculate how much you want to charge, assume:

• 2,000 hours per year
• 65% profit margin when you are the worker or 15% when someone else is doing the work
• Your income goals (let's say $100K per year to start)

Divide your income goal by the hours in a year to get an hourly rate. See the example below:

$100,000 / 2,000 = $50 per hour

$50 per hour would be revenue, though. To calculate the profit, you'd need to divide the hourly by .65.

$50 / .65 = $76.92 per hour

Let's make it a nice even number, so it's easy to multiply and make it a straight $80 per hour. You need to add your first-hour fee, though. Let's use the $70 Chris uses, and that will make the first hour $150, and each additional hour $80.

That means you need five hourly cleaners to make the same $100K profit you would if you were doing all the cleaning yourself. Now, if you have five employees plus yourself, you can make $200K per year after paying your employees their house cleaning rates per hour.

How to calculate cleaning cost per square foot pricing

The price per square foot is straightforward to estimate. Given that almost every address has a public record, you can look it up to see how many square feet their house is. Then to charge by the square foot, multiply the square feet by 20 cents (or divide by five).

Example: How much should I charge to clean a 2,000 sq ft house?

2,000 x $.20 = $400

2,000 / 5 = $400

Example: How much should I charge to clean a 3,000 sq ft house?

You can make it more complicated and separate it by carpet and tile, where the carpet is 20 cents and tile is 25 (examples for easy math).

(2,000*$0.20) + (1,000*$0.25) = $650

As you can see, the square foot billing can change based on the type of cleaning.

How much does it cost to clean a house per room?

Another easy way is to price by the room or by the fixture. Chris charges a fee per room plus fees for other specific tasks. For instance, he has a table that details:

• 1- to 10-room pricing
• Full restroom pricing
• Half bath pricing
• Add-ons like full window cleaning

Each has a specific price, so he can quickly estimate based on the number of rooms, restrooms, and add-ons. You should really check out how he does it on the Queen Bee Cleaning Service booking page.

Pro Tip: Chris uses Booking Koala to automate the whole booking process. Check it out, and let us know what you think!

How much do other cleaning services charge?

Professional cleaners have plenty of sites to help evaluate the average house cleaning cost in their areas. Many of the sites are the same ones you'll use to find customers for your house cleaning service.

For instance, Thumbtack makes it easy to establish the rates house cleaners charge in a particular area. While you're on the site, you might want to sign up to provide cleaning services.

Offer weekly cleaning service discounts

Whether you are a residential cleaning business or offer commercial cleaning services, your cleaning company can benefit tremendously by offering regular cleaning services at a discount to loyal customers.

House cleaners benefit from offering discounts for routine cleaning in the following ways:

1. Increased efficiency: Less travel time, more cleaning jobs completed per day, reduced house cleaning costs.
2. Better forecasting: Order your own cleaning supplies with more accurate forecasts.
3. Better scheduling: You can schedule house cleaners working each day more effectively.
4. Better cash flow: The more of your cleaning jobs that occur on a recurring basis, the better your cash flow will be.
5. Reduces churn: CB Insights says that subscription models change the customer retention dynamic from mostly churning to mostly retention.
6. Increases lifetime value: The value of a customer increases consistently over time.
7. Reduced marketing costs: Your cleaning company will be able to spend less on marketing when you have higher retention rates.
8. Lower overhead-to-revenue ratio: As a cleaning company's recurring jobs grow, the overhead stays the same until you have to invest in more equipment or administration.
9. Happier customers: Everyone (except maybe hoarders) loves a clean home! Someone coming in each week and cleaning their home will delight customers.

When you have long-term relationships you may want to have a commercial cleaning contract. Chris doesn't use them, but a lot of his suggestions still work for contracts.

We used the pricing from Queen Bee Cleaning Service to show how their subscription model increases the revenue over the course of a year. As you can see, offering a 10% monthly, 15% bi-weekly, and 20% weekly discount can dramatically increase the revenue of a house cleaning business.

How much do house cleaners charge for add-ons?

Customers might want you to offer other services like appliance cleaning. Anticipate this and have easy ways to calculate cleaning cost estimates. Some of the most common add-ons are:

• Deep house cleaning
• Appliance cleaning
• Laundry
• Dishes
• Indoor and outdoor window washing
• Carpet cleaning

You can add each of these to the house cleaning cost to help improve your revenue per cleaning job. A $200 cleaning job easily turns into a full day if someone wants all the add-ons. It will increase the cleaning rate to potentially as high as $1,000 and make it so your cleaning crew only has to clean one house that day.

That's great for reducing expenses!

How much do house cleaners make for estimates?

Whether you are doing a deep clean, home cleaning, or post-construction cleaning, people love free stuff, and businesses should, too!

Chris told us:

[su_quote]Most people don't know the square footage of their house.[/su_quote]

A free estimate gives you a chance to view the property, manage the risk of underestimating with a flat rate, and establish the square footage and whether it needs a deep clean. Plus, it gives you a chance to develop a relationship, ask questions, and help your customer develop a plan. This may increase overhead costs, but it builds loyalty.

Sign up for our exclusive 7-Figure Cleaning Business Blueprint

Knowing how to correctly price your cleaning services determines if your business will grow and prosper, or fail before it even gets off the ground. Chris will show you the best pricing strategies so you can start earning $10,000 a month in just three months as you launch your business! Sign up for our exclusive seven-figure cleaning course today by clicking here.

What type of pricing do you plan to adopt with your cleaning business?

Do you want to buy a franchise?  Nic Reed and Sanford Booth have both purchased franchises, while Mike Andes has sold around 70 franchises. Nic and Mike share their experience in franchising at Augusta Lawn Care, while Sanford Booth shares his experience buying a Big Frog franchise. We’ll explain the process of finding a good franchise, preparing to reach out to the franchisor, creating the documents you need, getting financing, attending a discovery day, and preparing to operate the company well.

What is a franchise?

A franchise is a business model with which the franchise owner, known as the franchisor, allows business owners to run a franchise location using their business processes, suppliers, and company name in exchange for paying franchise fees.

How is a franchise different from a chain?

There are several important differences between a franchise and a chain. A chain is owned by a single business entity, while a franchise is typically owned by multiple different business entities. A franchise may have corporate stores as well. For instance, Augusta Lawn Care’s Founder Mike Andes owns multiple corporate locations as well as offers franchises. He told us: [su_quote]I use my corporate stores to test new processes before passing them on to the franchisees.[/su_quote] Check out the video below that explains the differences between buying a franchise and starting your own business.  [su_youtube url="https://www.youtube.com/watch?v=MTnmagGo32Q&t=1085s"]

Where can I find the laws governing franchising?

Franchises are governed by the Federal Trade Commission (FTC). They specify:

• The features of a business that qualifies as a franchise:
  • Promises to provide a trademark or other commercial symbol 
  • Promises to exercise significant control or provide significant assistance in the operation of the business 
  • Requires a minimum payment of at least $500 during the first six months of operations. 
• The laws franchises must follow.
• The items included in the Franchise Disclosure Document
• The items included in the Franchise Agreement.

Make sure to read the FTC guidance before buying a franchise. Keep reading for the pros and cons of buying a franchise.

Pros and Cons of Owning a Franchise

As Mike told us, franchise ownership is not for everyone. There are some people that prefer to figure out everything and some who just want to increase their earnings without investing a lot of time learning. Let’s look at the pros and cons of owning a franchise. [su_note note_color="#dbeafc"] Pros

1. All the systems in place
2. Less to figure out
3. Built-in mentors available
4. More defined profit expectations
5. Might have built-in customers

Cons

1. Higher startup costs
2. Requires less creativity
3. Business strategies might not work in your area
4. Annual or monthly franchise fees
5. Service area is often dictated by the franchisor

[/su_note] Check out our interview with Nic Reed to learn more about the benefits of owning a franchise location. He told us: [su_quote]The nice thing about a franchise is I don’t have to figure out all the processes. Mike’s already done that. I just have to use his resources and see which (ones) work best in my market.[/su_quote] [su_youtube url="https://www.youtube.com/watch?v=9HwEN2uQlxM"] Keep reading to learn more about the franchise buying process.

How to Buy a Franchise You Love

When considering a franchise system, you’ll need to follow a specific process. There are nine steps to follow when buying a franchise:

1. Research Franchises.
2. Request the Franchise Disclosure Document.
3. Go to Discovery Day.
4. Apply for Financing.
5. Review and Return the Franchise Agreement.
6. Buy or Rent a Location.
7. Get Training and Support.
8. Prepare for the Grand Opening.
9. Operate the Franchise.

Let’s start by researching franchise businesses.

Step 1. Research Franchises

Like any small business owner, someone who wants to own a franchise should do their research first. Opening a franchise is a huge commitment and the franchisor does a thorough review of each potential franchisee to make sure they meet the requirements to be successful. You’ll want to be aware of typical franchise requirements and how to find good franchises. We’ll look at both to help you find the perfect franchise for you to start as a small business.

Typical Franchise Qualification Requirements

Prospective franchisees should be aware of the following requirements that most franchisors require:

• Credit score: Most franchisors will require a minimum credit score. If you have a 680 or better, you shouldn’t have an issue. Use Credit Karma to check your credit score.
• Net worth: Most franchise owners will require a minimum net worth of at least $100K, but estimates suggest that a new Mcdonald's costs $2.3 million. It’s gotten so high, they only let new franchisees buy an existing franchise.
• Liquid assets: You have to have enough liquid assets to pay the franchise fee without financing unless you are approved by franchise financing. 
• Other income: If you want your own franchise, you’ll need outside income. It can take six months to a year without revenue. During that time you have to be able to cover the costs of opening a franchise.
• Industry experience: You may need experience in the industry. If you don’t have it, you might want to go work in the industry before buying a franchise.
• Management experience: Franchise owners may want prospective franchisees to have management experience because it improves the likelihood of becoming a successful franchisee.

Make sure to have documentation of your financial situation and experience ready before researching franchise opportunities. Each particular franchise has different requirements. Don’t spend a lot of time applying to become a franchisee Keep reading to learn how to use the International Franchise Association (IFA) to evaluate franchise opportunities.

Check the International Franchise Association

The IFA has a database that helps people find the right franchise out of more than 1,400 opportunities across the globe. The franchise search can be sorted by:

• Industry: There are 15 choices including cleaning, business services, senior care, and food-related franchises.
• Location: Global or any continent other than Antarctica.
• Investment amount: $0 to $1 million. Make sure to reduce the highest amount unless you have $1 million to invest.
• Opportunities for the military: Some franchise business opportunities offer benefits for Veterans.

Once you conduct a search, you can view different franchise business opportunities by age, startup costs, veteran discount ranking, or alphabetically.  Be aware that some companies try to hide their franchise fee behind the total investment. There are some with no startup costs, but they might have total investments of $400K+. Meanwhile, most include their website information as well as startup and initial costs. The point of mentioning this is that some franchised business opportunities are more disclosive than others. It is always easier to work with a management team that is fully disclosive. I personally would not consider a franchise opportunity that is not. You’ll want to go through the franchise website and establish whether they are:

• An established brand: Look at the number of followers on social media accounts and the reviews on sites like Google and TrustPilot.
• Oversaturated: Do they have too much competition in your area?
• Disclosive about their fees: Some will openly disclose their initial fee, royalty fees, marketing fees, and other costs on their site. Others won’t.
• Offering training and support: Most franchises offer some business training and support to new franchise owners. It will normally be governed by the company culture and age of the franchise.

You can also try looking at some of these easy-to-buy franchises.

Easiest Franchises to Buy

The easiest franchises to start are typically:

• Home and Business Cleaning: Maid Pro, The Maids, Maid Simple
• Lawn Care: Augusta Lawn Care: Augusta Lawn Care,
• T-shirt and Sign Printing: Big Frog, Fast Signs

Mike told us: [su_quote]If someone works for an Augusta Lawn Care franchise for a couple of years, they qualify to buy a franchise without paying the initial franchise fee.[/su_quote] Once you have narrowed it down to one or two franchises, you can reach out to them to request the Franchise Disclosure Document.

Step 2. Request the Franchise Disclosure Document

This step includes gathering information that is not readily available unless the company is a publicly held company. The FTC  Franchise Rule requires a Franchise Disclosure Document that includes 23 items.

Necessary Elements in a Franchise Disclosure Document

1. Company history, predecessors, parent companies, and affiliates.
2. Officers’, directors’, and executives’ professional history.
3. Current and past litigation involving the company and major players in the organization.
4. Franchisor and management bankruptcies if any.
5. Initial franchise fees and what impacts their costs.
6. Ongoing costs such as royalty fees or marketing fees.
7. The initial investment to get the franchise fully operational (in table form).
8. Purchasing restrictions for equipment and supplies.
9. List of franchisee’s obligations including a table showing where each obligation is in the Franchise Agreement.
10. Terms and conditions of financing through the franchisor (if any).
11. Any assistance the franchisor will provide including advertising, computer systems, and training.
12. Description of the geographical territory the franchisee receives and whether it can be modified.
13. How the brand’s trademark(s), service and trade names may be used by the franchisee.
14. How the franchisee can use copyrights, patents, and other information.
15. What, if any, participation requirements are expected of the franchisee. 
16. Restrictions on products and services the franchisee may participate in.
17. How to renew, transfer, and terminate the business arrangement. Also how to dispute conflicts between the franchisor and franchisee.
18. Public figures that are employed by the franchisor and how much they are paid.
19. Optional unit financial performance information.
20. Location and contact information of all existing franchise locations.
21. Audited financial statements for the past three years. 
22. All the contracts that will be part of the formal contract including:
    1.  Franchise Agreement
    2.  Non-Disclosure Agreement (maybe)
    3. Non-Compete Agreement (likely)
    4. Supplier Agreements (common)
23. Confirmation of receiving the FDD.

Most franchises will have a contact form on their website. Others may request an initial consultation before providing the Franchise Disclosure Document.  When considering starting a franchise, you should review all of this information before going for a discovery day.

Step 3. Go to Discovery Day

Discovery day is when you go to the corporate headquarters to meet the franchisor and their team. They show you around, explain how they operate, and give you more information on the business.  A business owner should be looking for indications whether the franchise ownership is legit or just trying to make money through the franchise fee. Indications that the franchise opportunity may not be as attractive as it is on paper include:

• Personality clashes
• Cultural differences 
• Corporate office being unprepared for the business owner
• Statements that are not in the Franchise Disclosure Document
• Not answering questions directly
• Failing to address concerns
• Pressuring you to enter a franchise agreement

If you’re ready to move forward, the next step is to focus on how to buy a franchise.

Step 4. Apply for financing

The process to buy a franchise is similar to buying a business. It is easier to get a small business loan for a franchise because they already have a proven success record.  The franchisor may already have a deal with a bank to offer a small business loan to their new franchisee. When applying you will need to have:

• A business plan
• Documentation of personal finances
• FDD to show lenders the average annual income and financial risk of the franchise
• Proof of any assets you want to use for a secured loan

There are multiple options for funding when you decide you want to own a franchise. Some of the most common include:

• Liquid capital: Using cash, stock, and bonds to finance your business
• Secured loans: Using assets like a home, stocks, or crypto to secure a loan.
• Business partners: The franchise contract might limit this option.
• Business line of credit: Revolving credit that lets you borrow as needed and pay interest only on the amount outstanding. Great for preventing cash flow issues involving inventory and payroll.
• Equipment financing: For large purchases like kitchen equipment.
• Traditional business loans: 3-5 year loans to buy a business.
• SBA loans: We’ll discuss using an SBA loan to buy business startups and franchises below.

Check out our Hub article for a more detailed look at how to fund a business or keep reading to learn about loans from the Small Business Administration.

Apply for Small Business Administration Loan 

The U.S. Small Business Administration guarantees loans called SBA loans. These small business loans have some of the most favorable lending terms because they are backed by the faith of the US government.  When wondering how to get an SBA loan to buy a business or franchise, you’ll want to review the SBA’s guide. Three main types of SBA loans are available:

1. (7)a loans: Up to $5 million for working capital, refinancing debt, and major purchases.
2. 504 loans: Up to $5 million for construction projects, land, and equipment.
3. Microloans: Up to $50,000 and cannot be used for construction or debt.

You’ll have to exhaust all other options before qualifying for SBA loans, but if you qualify they are definitely one of the best ways to buy a business.  As long as you qualify for the funding, the next step in how to become a franchise owner is to review and return the franchise agreement. If you don’t qualify, then you’ll need to rebuild your credit, earn more revenue, or sell assets before you can buy a franchise.

Step 5. Review and Return the Franchise Agreement

You’re ready to be your own boss. You just need to review the franchising agreement. Franchise agreements are very similar to the FDD, but they are legally binding contracts between the franchisor and franchisee. If you haven’t already been working with a franchise attorney or other franchise consultants, you should probably hire someone who is well versed in franchise law. Any required fees will be well spent in exchange for professional help when you are learning how to start a franchise business. Franchising.com lists the 10 provisions in Franchise Agreements. These elements are the parts of the FDD that both parties are contractually obligated to follow:

1. Location or territory: What are your territory boundaries and exclusivity clauses? These will impact where to implement your marketing strategies and where you can do business.
2. Operations: What operating procedures do you have to follow to own a franchise? The operations policies are a major portion of why people consider buying franchises. These are the best practices that take time and money to develop when starting from scratch.
3. Training and ongoing support: What training and ongoing support is provided, who pays for it, and how much does it cost? Each program may be different, but the goal here is for you to be capable of running the business when you open the doors.
4. Duration: How long is the contract valid? 
5. Franchise fee or investment: What is the upfront cost and what does it cover? You should probably calculate the payback period based on other franchisors' experience.
6. Royalties or ongoing fees: What are the terms of ongoing fees and what do they cover? 
7. Trademark, patent, signage: How are you allowed to use the franchisor's trademark, patent, logo, and signage?
8. Advertising, marketing: What advertising does the franchisor pay, and what advertising does the franchisee pay? If they require more than 8% of revenue for marketing, you might want to be cautious.
9. Renewal rights, termination, and cancellation policies: How is the franchising contract renewed or terminated by each party? How are legal disputes handled?
10. Exit strategies: Does the franchisee have the right to put existing franchises up for sale? Does the franchisor have to approve the sale of a franchise? Does the franchise have to let the franchisor offer a buyback? Is the only way to sell the franchise through the franchisor?

This is the last real chance you have to decide to back out of the agreement. Review the agreement documentation against the FDD with a legal representative. If there are any red flags, you may want to consider whether the opportunity is the best franchise to own. Keep reading for information on how to buy a business location.

Step 6. Buy or Rent a Location

If you haven’t already, this is when you really have to ask, “How do franchises work?” and begin understanding what it means to operate one. When buying or renting a business location, ask the franchise to help with considering options.  Some may tell you that increased foot traffic is best, while another business system might suggest you go with the lowest cost per square foot. Meanwhile, According to their 2020 Annual Report, McDonald's owns 55% of the land and 80% of the buildings that franchisees utilize. There will be different considerations based on whether you are operating a retail establishment, office building, restaurant, manufacturing, or service and install company.  Read our blog about choosing a business location for more information.

Step 7. Get Training and Support

You’ll have to go to the corporate training to learn how to operate the business. Corporate training can be anywhere from a couple of days to several weeks. They’ll typically cover:

• Where to find resources
• How to perform the customer-centric functions of the business
• Introduce you to the software they use
• Walk you through the accounting process
• Train you on any machines that are unique to the company
• Marketing tasks

After that, you’ll be preparing for the grand opening.

Step 8. Prepare for the Grand Opening

Now you can prepare the franchise location for opening day. There will be three aspects of opening the franchise:

1. The location
2. The inventory
3. Marketing and advertising

Except for choosing the final layout, major preparations will likely be conducted by construction crews. I would discourage completing your own construction work unless you are well-versed in permits, building parameters, and timelines for such tasks.  The layout may be driven by the franchisor or by you. Make sure you follow any requirements the franchisor has.  Inventory should be entirely specified by the corporate office when opening. Afterward, they might allow you to make decisions about how to run the most profitable franchise in your location. They might have the inventory fully automated as well.  You might have guidance from the franchisor about marketing, advertising, and setup, or you might need to reach out to other franchise owners to ask them what worked and didn’t work when they opened their specific franchise. Remember to focus on getting the word out so when someone asks you, “How much do franchise owners make?” you can reassure them that it is worth it. You’ve learned how to own a franchise, but there is still one more step. You have to operate it.

Step 9. Operate the Franchise

Once you reach this stage, you are just operating a business like any other. You’ll be serving customers, managing employees, handling accounting, marketing, and filing taxes. We have a ton of interviews with franchise owners. Big Frog is a clothing printer that can give insight on how to own a franchise. Check out our interview with him below. [su_youtube url="https://www.youtube.com/watch?v=BmYCYMAsQ8Y"]

Buying a Franchise FAQs

Should you buy an existing franchise?

Yes, if it’s profitable. When you buy an existing franchise, remember to ask a lot of questions. Some franchise owners, like McDonald’s, will only let new owners buy an existing franchise because they want successful (experienced) franchisees to open new stores. Ask the following questions before buying an existing franchise:

1. Why are you selling your franchise?
2. How long have you owned the franchise?
3. Why did you originally buy the franchise?
4. What’s the annual gross revenue? Is it growing or shrinking?
5. How much profit have you made over the years? Is it growing or shrinking?

We include these questions and more in our blog 41 Essential Questions To Ask when buying a business. I suggest reading it for more information on why the questions are important.

What investment costs and franchise fees should I consider?

Initial investment costs are the costs that occur before the franchise draws revenue, but the franchise fees are what you pay directly to the franchisor. Initial investment costs can include:

• The franchise fee
• Forming an LLC or a Corporation
• Business licensing
• Buying or renting a location
• Remodeling
• Purchasing equipment
• Purchasing inventory
• Software not provided by the franchisor
• Furniture for the franchise location 
• Insurance
• Marketing
• Travel costs

What if I want to buy a franchise without money?

Most will not let you. They expect some actual investment. If you find one let us know, but franchises have requirements for:

• Credit
• Net worth
• Liquid assets

If you have a high net worth but low liquid assets, consider getting a secured loan or creating a corporation with a rollover business startup (ROBS).

How much does it cost to buy a McDonald's franchise?

According to the 2020 McDonald’s Annual Report, total development costs to open a new restaurant were approximately $4.4 million, but McDonald’s pays that and rents the equipment and land to the franchisee with a 20 year agreement.  McDonald's does not sell new franchises to new franchisees because they believe it protects their business to have experienced franchise owners open new locations. You’ll find a ton of answers online saying $45,000 franchise fee and $500,000 of liquid assets.  In addition, you’ll be paying a 4% per year royalty to purchase a McD’s.

How much money can I make by owning a franchise?

Each year most franchisees make between $50,000 and $100,000 per franchise location they own. 

How should I prepare to buy a franchise?

Learn as much as you can before approaching the franchisor. Then prepare your financial statements that prove credit score, net worth, and liquid assets.

How does buying a franchise save money?

Buying a franchise removes most of the learning phase of business development. The franchisor has already:

1. Created a business plan.
2. Created branding.
3. Conducted market research.
4. Conducted product research.
5. Created the business systems.
6. Created a successful marketing plan.
7. Proven the business model successful.
8. Created the processes to follow.

All you have to do is find customers in your area and follow the rules.

Live Wealthily Ever After

At this point, we’ve discussed everything from choosing a certain franchise to writing a business plan, how to get an SBA loan to buy business assets, and the documents you’ll see when buying a franchise. Once you’ve got a few years under your belt, you can start thinking about how to expand, hire more people, or buy more franchises. At this point, you have the information to start buying a franchise.  What franchises would you like us to interview?