What Is Job Management? | Everything You Need To Know
Whether your company just opened its doors today or you’ve been in business for decades, you need job management...
Learning how to start a cleaning business is not as complicated as it may sound. Yes, there is a bit of preliminary work and setup to complete before you get to the actual cleaning, but that’s true of any new business.
What are the specific steps for how to start a cleaning business? In this article, we answer that question and introduce you to a tool that can make opening and operating your own business so much easier.
The first thing to think about when considering how to start a cleaning business is the specialty you want to focus on.
Yes, you could try to appeal to as many types of clients as possible, but going too general at first can make it hard to stand out from the competition.
If, for example, you want to focus on residential customers, create a specialty, such as:
If you have decided that commercial is the way to go, think about the type of businesses you’d like to clean.
Commercial cleaning specialties include:
Keep in mind, because you’ll be cleaning businesses, you may have to work evening hours to avoid interfering with the company’s day-to-day operations. In addition, these sorts of cleaning services may require specialized training and equipment, resulting in greater up-front costs.
This would be especially true if you specialize in cleaning hospitals or other locations where you may encounter biohazards.
Whatever you choose, of course, once the business gets going, you can always expand your services into other niches.
So, let’s say that you’ve decided you want to learn how to start a cleaning business that caters to rental properties and Airbnbs in your area. But how much do you really know about the industry itself? This is where research becomes extremely important.
Read articles online. Talk to a friend who is already in the cleaning business to get their take on the industry. Get a job at another cleaning company to gain experience and see if it’s really what you want to do.
As you do all this, ask plenty of questions, such as:
You’ll also want to take a deeper look at local businesses that are operating in your chosen niche. What do they offer? Think about how you can differentiate yourself — possibly by offering additional services or special benefits.
It’s always helpful to find out what people are saying about the competition. Are they happy with them? Read online reviews to figure out what other businesses are doing well and what they need to improve. That’s where you can come in!
It’s also important to research the standard cleaning rates in your area for similar services so you know how much to charge your clients (more on this later).
Coming up with a name can be one of the hardest parts of learning how to start a cleaning business. We suggest doing this early on in the process so that you have plenty of time to think about the choice.
You can always change the name later on, but once you register with local, state, and federal organizations, purchase insurance, and open a checking account, it becomes much more difficult to make the switch.
Changing the business name after you’ve already been in operation for some time can also be confusing for both existing and potential customers.
That’s why it’s so important to find a name you like and stick with it. Doing so will make everything easier down the road.
Ready to find a name? This will take a little bit of research. First, you’ll want to be sure the name you choose is not already trademarked or already in use.
Even if another business didn’t go through the steps to trademark a name, they might be using it online. Do a basic Internet search of your preferred name and see what pops up. You don’t want a name that will be confusing or similar to another company that offers cleaning services.
If you’re feeling stuck, here are a few tips to help you think of the perfect name for your cleaning business:
Now that you’ve chosen a name for your cleaning business, it’s time to do the paperwork to make it official!
Once you’ve got the preliminary steps for how to start a cleaning business out of the way, it’s time to register the company with the proper authorities.
You’ll likely have to start by choosing a business structure, such as:
Being a sole proprietor means that you are working by yourself under your own name (e.g., Joe Public). This is the easiest type of business to form and is quite common as a result.
It’s important to know, however, that with sole proprietorships, you are personally responsible for any of the business’s financial obligations. For instance, if your business is sued, you will bear personal liability.
A Doing Business As (DBA) is a sole proprietor doing business under another name (e.g., Joe Public working as Rental Property Cleaning). A DBA is easy to obtain, generally only requiring you to file with your state or local government and pay a fee.
Keep in mind that a DBA is not a separate legal entity: It only permits you to operate under another name. A DBA does not shield you from personal liability as do some legal structures.
A Limited Liability Partnership is a legal arrangement that serves to keep personal assets and business assets separate. This structure has some advantages with respect to taxation and liability.
An LLP is not itself taxed, and profits pass through to the partners and are taxed at an individual level. This is good news when it comes to your obligation to Uncle Sam.
This structure limits partners’ personal liability. Generally, partners will only be liable for their own negligence and not that of their partners. However, it’s important to check with your state statutes, as some states treat partner liability differently.
An S-corp is an independent corporation that allows profits and losses to pass through to the owner’s personal income. By electing to be an S-corp, you get the limited liability of a corporation without being double taxed on the profits.
A C-corp is an independent corporation that is taxed separately from the owner’s income. Although a C-corp protects against personal liability, it also is more expensive when it comes to taxes.
This is because C-corps are double-taxed. First, the business itself is taxed on profits before any dividends are paid. Then, when profits are distributed as dividends, the individual receiving the dividend is taxed again on the income.
A Limited Liability Corporation is a structure that gives businesses the best of both the corporate and partnership structures. As pass-through entities, LLCs are not double-taxed. LLCs also protect against personal liability for its members.
Choosing the right structure for your cleaning business means thinking about issues like legal liability, tax consequences, and administrative fees.
You’ll also want to consider how many owners there will be and what involvement everyone wants in the day-to-day management of the business.
As you consider the best structure for your business, also look to the future. For instance, as your business grows, things like exposure to legal liability grow too. Find the structure that will fit your business now and in years to come.
If you’re not sure of the right legal structure for your cleaning business, you may want to consult a legal professional who can help weigh the pros and cons of each.
Depending on the type of business you choose, you’ll then need to register with the federal government in order to get a Taxpayer Identification Number (TIN).
After that, you can register your business with state and local authorities to obtain any necessary licenses.
You may not consider business insurance as a necessary part of how to start a cleaning business.
But, what if, in the process of cleaning, you break an expensive antique? You’ll be solely responsible for reimbursing the homeowner for the damage. That could take a big bite out of your working capital.
With business insurance, you pay a yearly rate that will cover any damages up to a certain dollar amount.
And, it’s not only breakage that you have to worry about. You or a team member could fall ill or get hurt on the job. It’s important to protect yourself from anything that can happen that will affect your ability to provide services.
In a nutshell, business insurance can protect your business from having to empty its bank account — and possibly close its doors — because of an accident on the job.
Once you’ve got all your paperwork in order, you’ve registered your company, and you’ve purchased insurance, it’s time to open a business checking account.
Regardless of the type of business you’ve set up (e.g., sole proprietorship, LLP, or S-Corp), opening a separate bank account for the cleaning company funds helps make recordkeeping and payroll much easier.
Similarly, keeping your personal account and your business account separate makes paying taxes less of a logistical and numerical nightmare.
With a business checking account, you won’t have to spend hours at the end of the year separating personal expenses and income from business expenses and income.
Congrats, you’ve reached the home stretch of how to start a cleaning business! Only a few steps left, the first of which is to set your rate.
When considering what to charge for your services, don’t just settle on an hourly rate that you — the one doing the cleaning — would like to be paid. You need to also factor in such variables as time, taxes, supplies, overhead, and profit/markup.
Every job is going to be different, but here’s a simple way to figure out a rate that covers all your bases and an example to get you started.
Customize the dollar amount and percentages in parentheses to fit your business and use it as a way to set the rate for your cleaning business.
It’s also important to look at your local competition when deciding your rate. This will give you a good idea of what the market looks like and what clients are willing to pay. Find your competitors’ websites and check if they have a fee schedule. If not, give them a call.
Once you know the local market rate for services like yours, you have a good place to start. If you decide to charge more than your competition, be sure you have a strong point of difference that explains why.
For instance, if your cleaning business uses only eco-friendly cleaners or specializes in deep cleanings, you may be able to charge a bit more.
In addition, you might want to consider having different rates depending on factors like frequency. Could you charge a little more for monthly clients and a little less for weekly clients? Sure! This way you incentivize your clients to be weekly.
This is easier for you — any space is cleaner if it’s maintained week-to-week rather than month-to-month. With a more regular client base, you’ll have a more predictable revenue stream.
Lastly, you’ll want to have a plan in place in case a job turns out to be bigger than you thought. If you’re charging a flat rate for cleaning, consider adding a caveat to your pricing in case a job proves to take more time than anticipated.
Every business comes with expenses. The cleaning industry is no different.
You’ll have to pay for items such as:
Additionally, if you don’t have a reliable vehicle, you’ll need one. You’ll also have to pay for fuel and any other transportation expenses to and from the job. All of these things can add up quickly and take a big bite out of your bottom line.
To save on expenses initially, you may be able to use clients’ supplies, but you’ll want to let them know that upfront. Also, keep in mind this will impact what you can charge for the services.
Once you create a budget, you’ll want to do your best to stick to it. You already calculated the major expenses for your business when you set your rate; use those numbers as a guide for building the best budget possible.
Remember, however, expenses can change over time, so it’s important to update your budget often. Job costing can help anticipate future budgets and profitability. Having a good handle on the overall financials of your business is essential to your success.
Now that you’ve got the business set up and ready to go, it’s time to find and maintain clients.
You may have to spend a bit upfront to advertise, but there are also many free and inexpensive ways to get your business name out there.
Ask your friends and family to spread the word. Post flyers on local bulletin boards. Start a social media page just for your business. Build a website. Get creative with your advertising to reach as many potential customers as possible.
Email marketing can also be a good strategy to find new clients and keep current clients in the loop. Think about starting a newsletter that gives your clients insight into your business and features a coupon or promotion.
Once you’ve got your first client, do your best work and give them quality service so they’ll stick with you for the long haul. Ask them to tell their friends and family about your services. There’s nothing better than a personal recommendation to drive word-of-mouth business!
Depending on the niche you choose, the process of starting a cleaning business doesn’t take a lot of fancy equipment.
What it does take, though, is the will to stay organized. Keeping track of appointment times, locations, specific tasks for each job, necessary supplies, and everything else can be a full-time job in itself.
If you were trying to learn how to start a cleaning business, you’re now off to a good start. Our nine tips will take you from finding a name and figuring out a niche to filing all of the necessary paperwork and getting your first client.
Inch is a suite of process and workforce management tools that can simplify every aspect of the way your cleaning business operates. With Inch, you and your team can perform a wide variety of tasks from any smartphone, tablet, laptop, or desktop, including:
The Inch app makes it easier than ever to coordinate and optimize your team and your entire cleaning business. For more free resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit TryInch.com today.
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