How to Start an Advertising Agency (and Make $500K/Year)
May 12, 2021
May 12, 2021
One of the hottest industries to start a business in is the tech industry—more specifically social media marketing.
We’re going to walk you through the process of how to start an advertising agency so you can begin your path to success in digital marketing.
We talked to Jason Yormark, founder and Chief Social Officer of Socialistics, about how he started his company and has 4x the revenue since starting it 2.5 years ago.
He started off with Microsoft then started blogging during a year layoff before getting hired back.
He started the Socialistics advertising agency as a side project but has grown it to managing $2-5K social media marketing campaigns for 15 clients, including Habitat for Humanity and the U.S. Air Force.
We’ll give you everything you need to know when starting an advertising agency, including an overview of the industry, developing the business concept, getting all the licensing/business requirements, commonly asked questions about advertising and marketing, strategies for launching, and business operations.
Throughout, we’ll provide input from Jason and myself on what we have found that works and doesn’t work. Keep reading to find out more.
Business owners in all industries need marketing. Most small businesses don’t have the time and knowledge to run their own ad campaigns, so there’s a ton of opportunity for starting a new business in marketing or advertising.
Let’s start by discussing the state of the industry. Because of the global pandemic, marketing spending dropped to $1.28 Trillion in 2020 according to PQ media. Jason experienced a drop in revenue which he attributes to:
I saw similar results in my marketing and blogging business from February through September of last year and then spending started ramping up again.
This year I’ve been getting approximately 3x the requests of previous years, which I attribute to my business maturing, combined with more business confidence.
Despite a drop in overall spending, according to Beroe Inc, global digital marketing was between $330-340 billion in 2020 and grew almost 13% over 2019.
Meanwhile, spending on legacy advertising formats like TV, billboards, and radio declined by 30%.
According to Safe Frog Marketing Group (through Hubspot), nearly 2/3 of companies hire an advertising agency or freelancer to manage part of their digital marketing needs.
Combine this with the number of marketing companies staying the same ,and spending on advertising expected to increase by 8-15% according to Forbes, this is the perfect time for starting an advertising agency.
One of the opportunities Jason told us about in digital advertising is the ability to attract potential clients with reduced retainers. Here’s what he had to say,
Globally, the 50 largest marketing/advertising agencies make over $460 million in revenue or more. The top ad agency, Accenture Interactive made over $4.4 Billion in 2018. Wow! They are killing it! If you want to see the full list check out this article by Agency Spotter.
According to IBIS World, there are 5,585 digital advertising agencies in the United States, so there is a ton of competition, but plenty of revenue to start your own agency and work for your ideal client.
I did a little estimation of what the average marketing agency makes based on these numbers, and it’s around $20 million.
Granted, some aren’t going to be anywhere near this, but even if you are making $75,000+ working from home as a one-man company, that’s not bad money.
Currently 2 years in, I make enough working part-time to pay the bills without stressing. It’s not nearly what Jason estimated:
The first step when you want to start an ad agency is to conduct research to determine what is right for you. Your marketing company should be focused on satisfying your potential client’s marketing needs while utilizing your current skill base.
You may want to start a marketing company focused on a specific niche, such as Business to Business (B2B) or Business to Customer (B2C), a general marketing company, or you may want to start a digital marketing firm focused primarily on a specific social media network like Facebook.
You aren’t limited to just one type, but this decision will impact how to start a media company. This decision will drive every move going forward.
Some of the common types of marketing companies are:
The Muse has a great article that describes what each type of marketing is like.
Socialistics focuses on social media marketing for B2B primarily. Jason told us,
Marketing is focused on helping people or companies become aware of a product or service and helping them move from unaware, to aware, to researching the offering, and finally to purchase.
Each business has a different model for accomplishing this. We’ll show you some of the ways to achieve this.
Keep reading for different types of marketing agencies.
I can’t stress enough the importance of the name you choose when starting a marketing company. It will communicate what the company is all about. Keep reading for ideas about how to name your startup marketing agency.
Socialistics’ name is a bit of a challenge for me to picture what it does. The name is unique, but here’s how I break it down:
Social – “ of or relating to human society, the interaction of the individual and the group, or the welfare of human beings as members of society” – Merriam-Webster Dictionary
-istics- “of, relating to, or characteristic of” – Merriam-Webster Dictionary
It took me a minute to wrap my mind around the name to realize it meant relating to social media. I wonder whether Jason was going for something that made people think more about what it does.
He could be taking the exact opposite strategy of what I’d normally suggest, which could potentially offer similar results.
I tend to prefer including words like Marketing, Advertising, or something to identify what your company actually does, which can make it easier for people to think of it when they are looking for help.
Make sure your business name is easy to remember when using a search engine. A crazy name like Onomatopoeia Tees makes searching for your business difficult because it’s hard to spell.
Because people tend to type fast, it can be helpful to register domain names for common misspellings of your business name and forward them to your website to make it easier for customers to find you.
Including your state, county, or city identifies you as a local business. For example, Sin City Modeling Agency would obviously be focused on models in Las Vegas.
I would typically discourage this for a marketing company unless you are specifically trying to narrow your business model to serve clients in the local area.
There is too much remote work available to limit yourself from the start. Later it might make sense, but in the beginning, it can be hard to get that first big client.
Does your name fit your branding? Some business owners focus on visual ideas for a logo before a name. Fortunately, Socialistics logo spells out what they do for people. Take a look:
As you can see, it has their name and “a social media agency.”
The “S” in the logo also hints at one of the advantages of social media marketing: the fact that internet marketing offers a closed-loop marketing strategy, while other forms of advertising do not.
Overall, I like it. It tells what the company does, suggests differentiation to those who know about the industry, and also could have ties to their belief in community service because what we put out into the world comes back to us.
Find a name for which the .com domain is available. It’s the most recognizable. You can conduct a search by clicking here. The longer you can purchase it for, the better. This helps communicate that you are in it for the long haul.
Some great places to buy a domain include:
See how people like it. Check Google Trends. Read articles like Five Tools for Naming a Business.
Make sure to check what happens if people shorten it. You wouldn’t want to name a business Sensational Product Advertising & Marketing because people might shorten it to SPAM, and that goes right to junk mail.
Once you’re satisfied with the name, register your business name with the government so you can protect someone else from getting it.
You need a business plan to help define the advertising agency’s objectives and strategy.
A business plan for your advertising agency guides decision-making, helps financiers consider whether to provide startup costs, and gives you something to show businesses who could be potential partners or clients.
A business plan should answer the following questions:
A creative business plan goes a long way. It needs to be inspiring, informative, and factual. There are a ton of businesses in constantly changing environments, so you need to stand out to a potential client.
A business plan that is constantly evolving helps you keep your business plan in line with where the business is and where you want it to go. We’ve compiled some resources to help you build an awesome business plan.
We’ve gathered templates to help you develop your business plan. Here are some of the best:
It gets better! Here’s some free and low-cost education on business plans:
Most types of businesses have similar processes that have to be performed.
Whether you want to know how to start a digital marketing agency or how to start a social media marketing agency, there are related expenses that will be incurred. Every agency will need to:
We’ll give you tips and information on how to get the most of your digital marketing company in each of these areas.
You’ve developed a plan and created a name for your advertising agency. It’s time to create the legal structure.
For best results, hire legal representation that has experience starting advertising agencies, like an attorney, accountant, or tax specialist.
It will simplify the process so you can get clients, build a team, and run creative campaigns.
There are five basic types of legal structures that most people will utilize: sole proprietorships, Limited Liability Corporations (LLC), Partnerships, Corporations, and Franchises.
Each has its pros and cons. You’ll have to decide which is best for you, but we’ve gathered information on each to make it easier.
A sole proprietorship is the easiest way to start a digital ad company, but the structure doesn’t protect the owner’s personal assets from legal issues. That means if something goes wrong, you could lose both your agency and your home.
This structure is the least difficult to set up, but I’d recommend agencies getting professional liability insurance and cybersecurity insurance because you’ll be a potential entry point to clients’ systems.
If your website, email, or other services get hacked, it could be detrimental to more than just your agency: it could cause client lawsuits.
To start a sole proprietorship, fill out a special tax form called a Schedule C. Sole proprietors can also join the American Independent Business Alliance.
An LLC is the most common business structure used in the United States because an LLC protects the owner’s personal assets.
It’s similar to partnerships and corporations, but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.
Each state has different requirements. Here’s a link to find your state’s requirements. Delaware and Nevada are common states to file an LLC because they are really business-friendly. Here’s a blog on the top 10 states to get an LLC.
Partnerships and corporations are typically for massive organizations or legal firms.
Unless there is a specific reason you need a partnership, it is better to do a multi-person LLC. Investopedia has good information about partnerships and corporations here.
There are several opportunities to purchase successful franchises. TopFranchise.com has a list of 10 advertising companies that you can start as a franchise.
This makes it where an entrepreneur can benefit from the reputation of an established clothing printer that has already worked out many of the kinks of starting from scratch.
Check out our BigFrog videos to learn more about franchise benefits. They are a t-shirt printing company, but they still have great advice on the business model.
Each location has different licenses, permits, or tax forms required. Use the SBA License and Permits page to find requirements for your locations. Some locations have very confusing regulations.
If you don’t work with a legal representative, make sure to talk to the employees who work in the licensing and tax offices. They can give you advice on which licenses you actually need.
Make it a point to follow the laws. I once met a person who failed to follow the proper regulations, and it cost her a substantial fine and nearly 100 hours of community service per month.
Ad Agency startup costs can be achieved for under $1,000. You basically need some space in your home, a website, social media, and some time.
If you are going to rent an office space or run a ton of paid ad campaigns, the cost goes dramatically up.
That’s not really necessary unless you are starting a franchise or have a local team that needs a space to all work together. When it’s just you, an advertising agency can be started for less than a few hundred per month.
If you do need to obtain external funding, other options include:
The SBA offers free courses on financing options and funding programs. For info on using personal funds to start a business, check out this article from The Hartford.
Alternative sources of funding include:
For most small business owners, an advertising agency can be a home-based business until you’ve reached profitability. Many will meet a client at a local coffee shop.
If you feel you need a more professional location to book the job, I’d recommend looking into office-sharing services like WeWork. They let you share space with others, reducing the expenses of having an office.
Some things to consider if you go other routes are:
Contact a local commercial real estate agent to assist you in the search. You can search for them by your area here.
A website is critical to a marketing company. It’s often the first thing people see, and if the job isn’t done right, why should they trust you to do their advertising right?
From a marketing perspective, your website needs to show you get results. But what does that mean?
Some things I look for when I search for businesses include:
Building a great website is so important. Fortunately, there’s a lot of things that make it easy. Using web builders has never been easier. They have tons of plugins and drag-and-drop functionality. I’d recommend the following:
Add the list of website builders into the article. Get affiliate links from Serge.
Alternatively, you can hire a web developer, but they’ll probably charge you up to $25k to do the same setup you would anyways. They just accomplish it quicker because they know what they are doing.
I’d recommend having all possible social media profiles because you never know where you’ll find a client. For B2B, the best is LinkedIn, but I’d also make sure you are on:
You can start with one and focus on it or try them all and narrow them down based on the results. Hootsuite has some good information on best practices. You’ll need to keep up to date on these if you are starting an advertising agency.
Every advertising agency will need a tech stack to make running the business easier.
I’m not going to go into great detail on each of them as they all have great educational resources available that I suggest you utilize as you’ll be using them a lot. Here’s the list of some I love:
These are the bare minimum I would suggest before starting an advertising agency.
Now that you have everything you need to start an advertising agency, it’s time to find clients and expand the business.
Finding clients can be done in a variety of ways. Agencies can use their personal network, the same ad strategies you plan to use for clients, conventions, and other techniques. The biggest thing is to be sincere.
Jason told us about how he managed to land the Air Force and Habitat for Humanity. He told us,
In other words, always be ready to listen because that might be enough to land a client.
Here’s what he had to say about Habitat for Humanity:
In that scenario, he had to do lots of follow up and be patient. When clients say “no,” they mean they aren’t ready yet.
Partnerships and collaboration for an advertising agency may come from selling other tech that they find useful, being listed in blogs and reviews, or through fields like photographers, graphic designers, and developers.
Another source of partnerships is non-profit institutions. As Jason pointed out:
If you can get a client that people know and share their values, it makes expansion so much easier.
Every person you come in contact with is a referral. Anything you do you should be trying to get followers, likes, and people signing up for your email list.
This makes a huge difference. You can then share more content with them to help them get closer to becoming a client. Even if they don’t own a business one day, they might soon.
Some useful tools include:
An advertising agency makes its money from retainers and is mostly a time-intensive business.
The reason digital marketers use scheduling tools for as much of their work as possible is they need someone to be available when their clients need them.
People tend to use Facebook at specific times every day. If no one is available to respond to comments because they are working on something else, that is going to harm the advertising agency’s clients.
If you are unable to satisfy your clients’ needs, they’ll go somewhere else.
Jason focuses on “service over revenue growth” because the revenue growth will come with time.
As long as they retain the customers they have, they know they’ll have around $40k/month coming in consistently while managing 15 clients.
Jason was concerned that his team being spread across the world would hurt him.
The idea that your team couldn’t be all together was something he viewed as a challenge at first, but now he views it as one of the main sales points. He told us:
There are a ton of great resources to be able to utilize the global workforce. Companies like Upwork are a great place to start. You can find reviews of other places to find marketing freelancers in this blog.
Top Advertising/Marketing Influencers
Starting an ad agency can be a highly rewarding career. We used insights from Jason Yormark and myself to help you get an inside look at what life in the marketing business is like.
We provided you with the knowledge and resources to learn about the industry and name your company.
You have tons of resources to get the business up and running, ideas on where to find clients, and ways to operate the business.
Now it’s up to you. Will you be the world’s next great advertising agency?
Brandon Boushy
Did you know that it costs less than $5K to start a cleaning business, but with the right strategies you can make more than $1.5M per year?
Join us as we discuss how to start a cleaning business from scratch. We’ll explore Cristobal Mondragon’s remarkable journey from starting Queen Bee Cleaning Services in 2015 to becoming a featured speaker at cleaning conventions.
We’ll share his story, the strategies and lessons Chris learned from starting a cleaning business from home, general information about the cleaning industry, and how you can start one of your own. Chris told us:
[su_quote]This is the best time to start a cleaning business.[/su_quote]
[su_note note_color="#dbeafc"] Get ready to learn how to open a cleaning business. Click on any link below to jump to that portion of the article, or just read on.
This guide will show you exactly how to start a cleaning service. Let's start by discussing the Queen Bee Cleaning Services:
Cristobal Mondragon and his wife started Queen Bee Cleaning Services in 2015. Today, he makes over $1.5M annually and has opened a second location. He’s been recognized by industry organizations for his excellence, and he’s used his success to expand into courses, customer relationship management, and coaching.
But it hasn’t been without challenges. Chris made the costly mistake of misclassifying employees as subcontractors, leading to a hefty fine.
That might stop many business owners, but he overcame the $10K hit and is passing his knowledge on to you.
Check out our interview with him below.
Now, let's look at what you need to know about the industry before starting a cleaning business.
According to IBIS World, the contract cleaning industry made over $90B in revenue in 2022 and will grow to nearly $100B by 2027.
There are 1,163,718 cleaning companies in the U.S., so considering the revenue figure above, that means they average $77,122.63 in annual revenue each. With wages being approximately 38.4% of revenue, that means it's pretty easy for cleaners who want to start their own business to take home around $45K after expenses.
Chris provided a spreadsheet of his accounts, which I modified to make his accounting match IBIS World's database for an easy comparison. His strategies help him earn nearly double the after-tax profit and nearly four times the take-home pay of the average cleaning business owner.
[su_table responsive="yes" alternate="no" fixed="yes"]
Year | Converting Industry To Average Business | QueenBee (Using Numbers Adjusted For Income Privacy) |
2022 Ind Revenue in Millions | $89,749.00 | |
Industry Revenue | $89,749,000,000.00 | |
Number of Businesses | 1,163,718 | |
Rev/Est | $77,122.64 | $1,130,896.00 |
COGS | $30,463.44 | $895,841.20 |
Gross Profit | $46,659.19 | $235,054.80 |
Salaries | $11,876.89 | $80,000.00 |
Other Expenses (Most likely rent, utilities, etc. that pertain specifically to running a home-based business) | $31,157.55 | $55,296.00 |
Net Income | $3,624.76 | $99,758.80 |
Approximated Owner's Earnings | $46,659.19 | $188,758.80 |
Net Income Percentage | 4.70% | 8.82% |
Owners Income Percentage | 60.50% | 16.69% |
[/su_table]
Get ready to find out the answers to these frequently asked cleaning company questions. We’ll answer questions like:
According to The BBQ Cleaner, cleaning services can earn between $20K and $100K in annual profit. A solopreneur cleaning business normally makes around $50K per year.
The Janitorial Store estimates the average profit margin for commercial cleaning businesses is between 10% and 15%. Profitability will vary based on your location, target market, pricing strategy, and the size of your business.
The factors below could make your cleaning business profitable:
Chris started Queen Bee with less than a $5K budget. He estimates you can start for less than $2.8K if you have a car. You can expect around 50% of earnings to go to payroll, including your wages. Another 30% of revenue will be spent on bookkeeping, advertising, overhead, and taxes.
Udemy offers inexpensive courses on budgeting that are worth checking out. Many cleaning companies love using Jobber as their cleaning business software to help lower costs.
Residential cleaning is the easiest type of cleaning business to start because it requires less initial investment than business cleaning services or specialized cleaning services.
You might also consider starting the following:
Completing International Sanitary Supply Association (ISSA) certifications will land you on their database of certified professional cleaners. That's a high-authority link to your website!
Queen Bee has a certification from the Association of Residential Cleaning Services International (ARCSI) as well as the Institute of Inspection and Restoration Certification (IIRC). He told us:
[su_quote] ARCSI certification teaches you how to use chemicals properly and avoid creating toxic fumes. It basically comes down to teaching you the chemistry behind each product and how to clean each [surface] … and avoid damaging them. [An] IIRC certification is similar to the ARCSI certificate but focuses on carpet cleaning and tile cleaning.[/su_quote]
Find out about more than 45 cleaning certifications.
Get FREE training for building your cleaning business with Chris Mondragon's webinar, “How to Start a $125K Per Month Cleaning Business From Scratch.”
During this FREE training, Chris will share his proven secrets for starting your own 7-figure cleaning business in just one week. You don't want to miss this rare opportunity to learn from this multi-million-dollar cleaning business entrepreneur for free!
Starting a cleaning service company doesn’t have to be hard. We've outlined the process for starting a successful cleaning business in nine steps:
Let's start by discussing what cleaning company customers to serve.
You need to understand who your target clients are to run the business successfully. Do some market research to find out where they are located.
A house cleaning business will normally do cleaning jobs for more affluent homeowners, while an office cleaning company will be looking for new business owners. Both groups can benefit from finding prospective clients who are unhappy with their current provider.
Take some time to do market research about how to align your brand and company values with the target market. Then choose a cleaning business name.
Next, you’ll learn what cleaning company services to provide.
Research different types of cleaners and establish what is right for you. Specialized services tend to do particularly well. We created a list of cleaning company types and what they offer. Consider starting some of these cleaning businesses:
Offering a variety of services can help you reach more clients. Queen Bee Cleaning Services provides house cleaning (including Airbnb and move-out cleaning), janitorial services, carpet cleaning, and hospital-grade disinfectant services. Chris told us:
[su_quote] Recurring house cleaning is our bread and butter. Move-in and move-out services can have some surprises. Airbnb can be really profitable when you get it right. [/su_quote]
Next, you’ll learn what goes into a business and marketing plan for a local cleaning company.
You need a business plan to help guide your decision-making. It keeps you focused. The plan will help define your vision, target market, objectives, startup costs, and strategy to get potential clients.
A business plan is a living document that will help you secure financing and help you manage logistics better than other small business owners. Make sure you write one!
Try out our business plan templates and resources below as you learn how to start a cleaning business.
Most cleaning businesses operate from home for the following reasons:
Chris runs his small business from home, and when we interviewed him two years ago, his business expenses for rent and utilities were only $750 per month. He even told us most of those expenses actually helped the business from an accounting standpoint.
However you plan to do your bookkeeping, don't forget to check the Municode Library to find the local ordinances about starting a home-based cleaning business.
Keep in mind that running a cleaning business where children and pets live can be dangerous. Cleaning materials can be toxic, and some are explosive if combined. The EPA offers guidance on handling household hazardous waste.
These business plan templates and resources will help you prepare to get residential and commercial cleaning jobs. Want to know the best part? They're all free!
Also, check out our interview with Mike regarding business plans. Mike offers lawn care services, but his advice applies to commercial cleaning services. Plus, his small business is one of the fastest-growing franchises in the country.
Chris has tons of resources to help you start your own cleaning business. Check them out in his free training course.
He emphasizes the importance of getting every facet of your process documented to create workflows. His clients appreciate the transparency he provides with his pricing. You can be confident in your endeavors if you seek to model your business after Queen Bee.
Your cleaning supplies depend on the services you provide, but you can start by purchasing equipment like a vacuum cleaner, window cleaner, and a few microfiber towels.
For more information about what cleaning equipment you'll need for a maid service, check out our guide. It's effectively a cleaning business starter kit!
Chris even offers a hospital-grade disinfecting service, which requires specific supplies. He told us:
[su_quote]We use an electrostatic sprayer to apply the disinfectant. The sprayer ‘loads’ the mist with a positive charge, making the disinfectant stick to all surfaces, killing 99% of the pathogens. Our hospital-grade disinfectant is an EPA-certified product safe to use around children and pets and safe on all surfaces.[/su_quote]
Next, we’ll discuss whether you need a business loan when you start your local cleaning company.
Ever wonder why so many people get into the cleaning business? It has a low barrier to entry. The initial investment to start a home cleaning business can be one shopping trip to a home improvement store.
Funds to start your cleaning service can come from:
Check out our article about business funding. We cover 17 ways of funding a business to help you decide which practices are best for you.
Alternatively, the SBA offers free courses on financing options and funding programs. The Hartford published the pros and cons of using personal funds to start a business.
Don't forget to check out our lending partners.
Once you’ve got the money, it’s time to register your business and get your cleaning business license.
Once you have a business plan, you'll want to come up with a memorable name. Considering each of these aspects will help you beat out your competition:
Queen Bee does a great job as a brand because it is the hive leader (best of the local residential cleaning businesses), but it doesn't clarify for potential customers where the service is, widening its potential customers.
Once you have a name idea, run it by your friends and family. Test it on Google Trends. Our business name generator connects you directly to NameCheap when you click on one of the business names. There, you can buy the domain name and other services.
Pro Tip: Aid your brainstorming even more with our ultimate list of cleaning business names.
When you have your name, you'll want to choose a legal structure. Legal structures include sole proprietorships, limited liability companies, and corporations.
To establish a legal business structure, work with an attorney, accountant, tax specialist, or government official for the best results. Then you can register your business with the necessary state and local agencies.
Next, you'll want to get your business licenses.
Regardless of the business structure, determine if your cleaning company requires a business license, permit, or a specific set of tax forms to operate legally. We researched each state to create our guide to cleaning business licenses. Alternatively, you can use the SBA tool to find out which business licenses you need.
A local business owner should purchase general liability insurance, especially if they serve commercial clients, which require it. General liability insurance covers property damage and bodily injury.
Check out our blog about how to get business insurance for more information. We recommend using Simply Business to find the best business insurance rates.
A franchise consists of a franchisor company and a franchisee in a joint venture to sell the franchisor's products and services. In essence, a franchise enables you to enter the market with a ready-made cleaning company.
Many franchise opportunities exist in the cleaning industry. Well-known franchises are The Maids, ChemDry, and PuroClean. Learn more about buying a franchise.
At this point, you know how to set up proper licensing, but a successful business needs to provide consistent services and pricing.
A small business owner will need to establish how much to charge for cleaning services. Research reasonable prices to stay competitive while still making a profit.
There are three typical ways house cleaning prices are calculated by a house cleaner:
Learn more in our house cleaning pricing guide.
Next we’ll discuss how to get commercial cleaning contracts.
Building customer relationships is crucial for starting a cleaning business. Some of the best digital and traditional marketing techniques when you start a cleaning business include:
Learn more about how to get clients for your cleaning business.
Chris reveals all these incredible tactics, plus his pricing structure, in his 7-Figure Cleaning Business Blueprint course. You get to see how Chris executes all the most important techniques from the course live.
It’s time to implement your marketing plan next.
Advertising and promotion marketing are important for starting any business, especially a cleaning service. In fact, marketing is one of Chris’s biggest expenses in his budget.
His marketing budget is an average of $4,212.50 per month. He spends primarily on Google Local Ads, but he also spends a portion on Yelp, Craigslist, and Facebook. He told us:
[su_quote] Craigslist ads are low-cost and have done really well. You should definitely include them [in the list of places you run ads]. [/su_quote]
Chris has become highly ranked on Google, Yelp, Nextdoor, Houzz, Thumbtack, HomeAdvisor, and Porch. Focusing on building your business presence on highly ranked websites helps increase your site's authority.
He shares his Facebook ad strategy in our master course. It's surprisingly simple but gets a return on ad spend of 16-41X.
You'll want to use a combination of:
One of Chris's marketing strategies is putting door hangers on three houses in each direction after each cleaning. These fliers give first-time customers discounts. Many customers who took advantage of this sale were so impressed with the service they happily joined his subscription plans.
Pro Tip: Check out our article on how to get cleaning contracts.
As a business owner, you might have a goal for your house cleaning services to create jobs and make more profit. If you do, check out this next section.
Imagine what it would be like to have so many referrals and so much business that you can't handle it all yourself!
While many cleaning businesses are one-person operations, owners often find that it helps to have employees for practical and profit-based reasons. After all, you might want to take a vacation!
Before you hire employees, you must address the following:
Other requirements include:
Compensating employees is probably going to be your most significant expense. It is for Chris. You can either pay employees an hourly rate or per task. Chris pays an hourly rate of about $19, but local businesses can choose which works best.
If you're a busy house cleaning company with lots of customers near each other, both you and the employees can benefit from performance-based pay.
Now you have the tools and knowledge to embark on your path to success in the cleaning industry.
Remember, it's crucial to understand your target audience, choose the right type of cleaning services, and create a solid business plan. Proper funding, registration, and pricing strategies will lay a strong foundation for your business.
Once your business formation is complete, build a loyal client base through effective marketing and excellent service. Don’t forget to ask for reviews to ensure long-term success.
As your business grows, don't forget the importance of hiring and managing a reliable cleaning crew.
Whether you're dreaming of starting a small residential cleaning service or building a multi-million-dollar empire like Queen Bee Cleaning Services, the journey begins with a single step. Take the knowledge and insights gained from this guide and start your journey to entrepreneurial success in the cleaning industry today.
What's stopping you from starting a cleaning business?
Want to be your own boss and quit your day job?
We’ve got you covered with our guide to connect entrepreneurs with their goals. We’ll show you how to become an entrepreneur with advice from five business owners who have turned their ideas into multi-million dollar businesses and opened up even more opportunities.
Becoming an entrepreneur requires wearing many hats. You’ll have all kinds of responsibilities, including marketing, human relations, inventory, legal compliance, and more. You’ll want to follow these steps to join the ranks of successful entrepreneurs:
Read from start to finish to learn all about becoming an entrepreneur, from identifying a good business idea to building a brand. Or click on any of the links above to jump straight to the section you need to learn more about right now.
To become an entrepreneur, you need to find the intersection of what you’re good at, what makes money, and what people will pay you to do. Start by writing down your hobbies, skills, and experiences. Here’s an example of what mine look like:
Hobbies | Skills | Work Experiences |
Learning | Math | Restaurants |
Helping Others | Writing | Construction |
Traveling | Problem Solving | Retail |
Concerts | Researching | Delivery Services |
New Experiences | Customer Service | Photography Business |
Storytelling | Surveying Customers |
As you can see, my combination of skills, hobbies, and work experience hints that I need to be doing something that uses lots of skills and covers a variety of industries. Writing for UpFlip fits that bill.
Also write down things you don’t want to do or would find inconvenient. For instance, if you’re not a morning person, you might not want to start a construction company.
Try writing yours down and see if you learn something about yourself. You can also take an interest and aptitude test to find businesses you might do extraordinarily well in.
Next, you’ll want to find a business idea to pursue.
Next, you’ll want to come up with a business idea that fits well with your life.
We have a vast selection of ideas for you to consider when you decide to start a business. We’ve got you covered for a side business, companies that generate passive income, or a business idea that requires eCommerce.
Check out some ideas from Paul Akers:
After you’ve listed businesses you are interested in starting, it’s time to conduct market research to determine whether there's a demand for your product or service. You’ll want to research information like:
Check out our blog about market research to learn more.
You’ll want to save your answers, and where you got them, because you’ll need them for the next step.
A well-structured business plan helps you clarify your goals and strategies. Outline your business concept, target market, competition, marketing strategy, and financial projections.
Small business owners have different ways of writing a business plan. Some just write a one-page business plan to keep themselves on track, while others write a 100-page plan and pursue venture capital money or loans.
It’s important to note that the majority of successful entrepreneurs have a business plan. You should also be flexible, as 93% of Harvard graduates who chose to become an entrepreneur pivoted from their original strategy to increase success.
Check out our interview with Mike Andes to learn how he writes a business plan.
Entrepreneurs need skills like:
Consider taking courses, reading books, or attending workshops to develop these skills.
Making something out of nothing requires creativity. Just like an artist with a blank canvas, a successful entrepreneur will take an idea and paint a picture with their business plan.
Successful businesses are teams, and the business owner is the coach. In today’s world, the old model where you could abuse your employees and they’d stay doesn’t work.
A successful entrepreneur looks to find people with aligned interests and empower them to achieve their goals while helping the company achieve its goals.
SessionLab has a great blog on exercises aspiring entrepreneurs can do to improve their leadership skills.
Successful entrepreneurs know how to communicate. You’ll have to talk to customers, investors, and employees. Everyone has different ways of communicating, and with all the lines of communication available, learning how to communicate with each stakeholder can be a challenge.
Email, video conferencing, in-person, and other methods are consistently used, and each of them has its own challenges. Try some of these exercises to build communication skills.
Many entrepreneurs struggle with this element of starting a business. You can always outsource, but it helps to have a solid understanding of marketing, and particularly digital marketing.
There are tons of free certifications you can take to learn about marketing. Some of my favorites are:
While you don’t have to have these certifications, successful entrepreneurs need to understand the “language” of the people they supervise.
The point of a business is to make money. It will be hard to be a successful entrepreneur without a basic understanding of accounting.
Consider taking a course or two so you can better discuss your financial strategies with a certified public accountant.
Successful entrepreneurs are good at solving problems. Some ways to improve your problem-solving skills include:
One of my favorite quotes is from John Maxwell: “Change is inevitable. Growth is optional.”
You’ll deal with constant change on your path to become an entrepreneur. Employees will come and go, and market trends will evolve, but will you?
If you aren’t adaptable, you’ll probably find running your own business tedious. Many entrepreneurs spend most of their days jumping from one task to another and need to know how to shift gears.
The best way to learn adaptability is to go through trials and tribulations. When something challenges you, take a minute, center yourself, and ask why it evokes a response. Once you understand the emotional response, tackle the problem.
A new business venture rarely becomes immediately successful. It can take years for entrepreneurs to find the right combination of product, pricing, and marketing strategies to get the market interested in what it creates.
The best you can do is learn from your mistakes and keep moving forward.
For inspiration, read about Thomas Edison’s persistence when creating the lightbulb.
Murphy’s Law states that what can go wrong will go wrong.
A successful entrepreneur needs to be prepared for things to go wrong when they own a business. How quickly they gain composure and find a way to fix it will dramatically impact their success.
Connect with other entrepreneurs, join business associations, and attend networking events. A support network can provide valuable advice, mentorship, and potential partnerships.
We’re creating a mentorship program that will help you network with other successful entrepreneurs. Sign up for our newsletter to be one of the first to join.
You’ll need to choose a legal structure for your business. It’s best to consult with a lawyer or legal advisor to understand the implications of the different business structures, but the most common business structures are:
The business owner and the business are the same entity, which means if someone sues your business, they could take your personal assets.
An LLC makes your business a separate entity and provides liability protection—as long as you have a separate bank account, do not personally cause an incident, and do not sign away the protection (beware: lenders try to get you to).
LLCs require less paperwork and compliance work than a corporation, too.
A corporation also offers liability protection and also the issuance of shares, but there are numerous compliance issues that may occur.
Learn more in our blog about business structures.
You’ll need money to become a successful entrepreneur. That doesn’t mean it has to be your money, but it’s easier to build a successful business if it is your money.
To fund a business you’ll need to:
A key step to becoming an entrepreneur is calculating how much money you’ll need to make before your business becomes profitable.
Early-stage companies can become successful within a few months, depending on the business model, but Tesla took 17 years to have a profitable year.
Your financial projections should be made with the following figures in mind:
We’ve created a startup cost estimator to help you establish how much you’ll need to make to break even.
Once you have a budget, you need to establish whether you have the money or need to find funding. The funding you’ll need for the small business needs to be high enough to cover you through the time when the business model is not making an operating profit.
You may also want to add wiggle room because many businesses fail when they run out of money. Assuming an additional 20% should cover unexpected expenses.
You can get business funds from numerous sources, including:
Let’s discuss how to become an entrepreneur using each of these funding sources.
Many entrepreneurs start by self funding. This is the most common way to start a small business. You might use your own money from working, savings accounts, or rollover business start-ups (ROBS).
A ROBS allows a business owner to own company shares with their retirement account. The small business then has funds and doesn’t pay a penalty for early withdrawals.
When you become an entrepreneur, it may be beneficial to have a partner.
Business leaders will often want additional sources of revenue and agree to be a business partner and mentor to other people. Whether the partner is a silent partner or active in the business model can be negotiated.
Venture capital firms look for startup entrepreneurs who have ideas that could make them millions or billions of dollars.
The firms help promising business models get the funds they need to make it through the startup grind, and they effectively manage these businesses until the company qualifies to go public. The venture capitalists gain massive wealth in the process.
Learn how Keith McCall raised millions of dollars for Pollen Systems through venture capital firms.
Angel investors are similar to venture capitalists, but there are some major differences:
You can take out personal loans or small business loans to become an entrepreneur, but unless the company is an online business with a business model that is likely to scale, you may find it difficult to get funding until after you don’t really need it.
You can learn more about small business loans on the Small Business Administration’s (SBA) website.
The SBA also licenses SBICs. They’re a cross between venture capitalists and banks, where they offer both debt and equity options. For every dollar the SBIC provides you, the Small Business Administration provides two.
Another way to start an entrepreneurial career is crowdfunding, which is when new entrepreneurs list offerings to potential investors on a website in exchange for debt, equity, rewards, or donations.
Check out our interview with Jason Hernandez. He started Pooch Selfie by fundraising on Kickstarter.
An MVP is a basic version of your product or service that allows you to test the market and gather feedback. This might be a prototype of a physical product that people test before mass production, or it might be a less sophisticated version of the intended software.
You’ll want to follow these steps to create an MVP:
Remember, the key to a successful MVP is to keep it simple, focused, and aligned with solving a specific problem or delivering a clear value proposition. It's about learning from real user interactions and using that knowledge to guide the development of your product.
Learn more in our blog on product development.
After you spend money creating your product, it’s time to build your brand. You’ll need to complete the following tasks to build a winning brand:
Your logo can be basic or elaborate. Most companies try to keep at or below three colors and want the logo to help explain what they do.
MaidThis is an online business that focuses on booking Airbnb and home cleaning jobs. Hear how Neel made the logo and has turned the remote cleaning business into a $2M per year company.
Entrepreneurial success normally relies on digital marketing, and the center of any digital marketing strategy should be your website. It’s where new customers find you after typing something relevant into a search engine.
Learn more in our blog on website creation.
You’ll probably want to at least have a small presence on every popular social media platform. Make sure your business’s profile fits its company culture.
You’ll want to research best practices for each one and start building a following. We’ll talk about that more in the marketing section.
As you gain traction on several platforms, you can focus on the ones that help you get more satisfied customers.
Companies selling physical products need to have packaging that matches the brand image they want to portray.
Check out Packlane’s blog about custom packaging to get your creative juices flowing.
Many local businesses find success, and part of what plays into that success is how they use their vehicles, buildings, and uniforms to convey a brand message.
Mike Andes started a lawn care business that is one of Entrepreneur’s top 500 franchises. He discusses elements of branding in the video below.
Your brand guidelines will provide information to employees and marketers about how to use your brand assets. Check out the brand guideline example below.
Develop a marketing strategy to promote your business. You should include:
A profitable business focuses on finding ways to bring people to its website. Content marketing focuses on creating content that people will remember and find useful—and hopefully develop a positive relationship with your brand in turn.
You’ll want to share all the content you create on social media platforms. You want to use that content to encourage actions, including:
Notice that each of these steps is building a closer relationship with your audience and will help you get closer to your goal of becoming a profitable business.
Not all entrepreneurs have the patience to go through this process on their own. You may find it easier to hire a marketing team with experience in your product category if you are hoping to be an overnight success.
SEO works amazingly alongside content marketing and social media marketing.
The goal with SEO is to identify the intent and questions that search engine users have, then provide them the information they want to know. When you successfully help answer questions better than other websites, you may rank higher in the search results.
You can use software like Semrush and SurferSEO to identify the best strategy for answering searchers’ questions and ranking highly in search engine results.
After you have collected a person’s email, you can use email marketing tools like MailChimp to separate people into email lists and automate when you send them emails.
This helps you keep your customers and followers informed about new developments in the company and can increase their lifetime value.
Paid advertising still has a place in marketing, but it is extremely costly if you don’t narrow your target market.
For instance, just by narrowing their ads to people who live in New York City, local businesses can get nearly 40 times better results than if they allow the ads to be shown nationally, and almost 1,000 times better results than if they showed globally.
Local (NYC) | National | Global | |
Number of People | 8.6M | 340.4M | 8.1B |
Percent of Global Population | .11% | 4.2% | 100% |
Savings | 99.89% | 95.8% | 0% |
Cost to Show Whole Area One Ad on Google | $26,832 | $1,062,048 (39.6x Local) | $25,272,000 (941.9x Local) |
Cost to Show Whole Area One Ad on Facebook | $73,960 | $2,927,440 | $69,660,000 |
Given New York City has over eight times the population of most U.S. cities, that means you can market to almost any city for less than $4,000.
Reduce your target market even further, and you can start making it so locals think about your company when they need the service you offer.
Providing exceptional customer service is crucial for building customer loyalty and a positive reputation for your business. Here are some steps you can take to deliver outstanding customer service:
Remember, exceptional customer service is an ongoing effort that requires dedication and a customer-centric mindset. By prioritizing your customers' needs and consistently delivering high-quality service, you can build strong, lasting relationships with your customer base.
Keep track of your finances, manage cash flow, and ensure you have efficient operational processes in place. Most companies use QuickBooks to manage their finances.
Once you've established a solid foundation, consider ways to grow and expand. This could involve hiring more employees, entering new markets, or offering additional products or services. Check out our blog about how to grow a business.
Remember, becoming an entrepreneur is a journey that requires continuous learning and adaptability. Stay open to new ideas, seek feedback, and never stop refining your business.
Now you know how to become an entrepreneur. We’ve discussed everything from choosing an idea to finding funding and building your brand.
Want instant access to business models that work? Skip the formal education and join our global community of young entrepreneurs by taking one of our online courses. Learn more here.
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Thank you so much for those ressources. Love.
Thanks so much Boushy for this helpful and detailed report! I really learnt so much and I figured out for myself couple of new insights on how to craft detailed blog posts, how to get my marketing agency up & running. I guess, 2022 is up to me to put in the work! Thanks.
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