How to Start a Cleaning Business from Home
By: Drake Forester | Last Updated June 9th, 2020
When You Want More
Starting a cleaning business from your home can be a great way to utilize your passion for serving communities, caring for others, and cleaning! Plus, the demand will never go away. Everyone needs their homes or workplaces cleaned – and it’s a task many are willing to pass on to someone else. With minimal start up costs and a self-motivated spirit, you can quickly become the owner of a successful cleaning business.
Below, we’ve done the legwork for you to provide a free guide to starting a home-based cleaning business today.
Not interested in starting a cleaning business? Visit our generic Start A Business Guide.
What Does a Cleaning Business Do?
The short answer is – they clean. But, within the cleaning industry, there are a number of specialties.
Most companies will focus on one of two areas – residential cleaning (homes/apartments) OR commercial cleaning (office/buildings). Beneath those two main umbrellas, you’ll find housekeepers/maids, house cleaners, and janitorial services. It’s truly up to you – the business owner – to find your specific niche. Here’s a brief overview of what residential and commercial cleaning businesses do.
- Residential cleaning companies: Residential companies typically focus on homes and apartments by offering housekeeping/maid and/or house cleaning service. Tasks such as doing laundry, washing dishes, making beds, running errands, and preparing meals are often listed under ‘housekeeping/maid service’ – employees essentially take on the daily household chores. House cleaning tends to include weekly or monthly deep cleanings of bathrooms, floors, windows, and furniture.
- Commercial cleaning companies: Commercial companies – often referred to as janitorial services – are those that clean office buildings, schools, and other public areas. They’re responsible for cleaning waiting rooms, doors, outside windows, and public restrooms. Although it definitely varies, most companies will be contracted for a combination of daily and deep cleanings.
Steps to Starting a Cleaning Business
Create a Business Plan for Your Cleaning Business
Before you get started, you’ll need an idea of what resources you’ll need—and how to monetize your business in a practical way. We’ve answered the biggest questions about clients, costs, and profits below.
Who is the target audience?
It’s very important to think about what type of client you’re seeking and wanting to serve. A residential cleaning business will focus their advertising towards working families, career-oriented singles, the elderly, and/or busy college students. Commercial companies are looking for small/large businesses, schools, parks, malls, and other public areas.
Right now, there’s a high demand for commercial cleaning services – especially as more sanitation protocols are put in place for businesses. However, that specific market is dominated by established companies. So, unless you have a set team or a good lead, it will take time to start tackling larger jobs.
In the beginning, you might consider sticking with residential cleaning. Currently, there’s less of a demand for home or apartment services, but it’s an excellent place to begin. Once you’ve built a solid client base within your community, you can start branching out to businesses.
How do I get clients?
Once you’ve determined who your target audience is, you need to find them! Figure out where they live, what social media they use, where they hang out, and what jobs they have. Get to know your client base – then figure out what services they’re seeking and how you can help! Clients will feel like you understand their needs, making your business more attractive.
- Create a marketing plan: Although social media is a powerful too, and one you should absolutely utilize, not every client – especially the elderly – will have Facebook, Instagram, or Twitter pages. So, once you’ve made social media pages for your cleaning business and shared them with all your friends and family, start considering other avenues for advertising. Online job markets such as TaskRabbit or ThumbTack are geared towards connecting people with professional businesses. If you’re concerned about people without internet, you can create custom postcards on websites such as VistaPrint or MOO.com to send out through the mail. Once you’ve created your postcards, check out the USPS Every Door Direct Mail (EDDM) service to learn how to mail your information.
- Build credibility: All successful cleaning businesses rely on trust. As calls begin coming in, consider asking satisfied clients to refer anyone they know looking for cleaning services or write a few complimentary words on social media. Potential clients need to know they can trust you – especially if there will be kids or valuables around while you’re working. A glowing review from someone a future client knows will help spread the word that you’re trustworthy. You might even want to consider offering discounts for those who pass your information on.
- Check out the competition: Look at websites or social media pages for other cleaning businesses. See what services they provide and where you can fill in the gaps. This also helps when trying to determine your prices – clients want a good deal!
- Create offers no one can refuse: The goal here is to make the most of what your audience needs, adapting to them, and following the season. For example, a deep carpet cleaning with 50% off window washing can be a great spring deal following those cold winter days.
How does a cleaning business make money?
Cleaning businesses typically accept work upon request. When you’re just starting out, you’ll probably be taking one-time jobs. However, as you begin establishing relationships with clients, you may want to offer contracts for weekly or monthly service.
Here’s a list of information you’ll want to include on your business contract:
- Business name.
- Address of place you are cleaning.
- Access rights – specific times and days you are allowed on the premises.
- Any equipment or supplies to be provided by the client.
- Payment terms – due dates, late fees, and accepted methods.
- Date you will begin services – and the end date, if applicable.
- Services the client expects to be performed.
- Termination rights for both parties.
- Any relevant federal, state, or local legislation.
In addition, you’ll want to decide if you’re going to charge an hourly rate OR flat fee based on number of rooms, total square footage, or type of service being requested.
How much money will it take to get started?
On average, you’ll need a reliable vehicle and between $1000 and $2000 to start a basic cleaning business. Initially, you’ll spend most of your money on cleaning supplies and equipment. A high-quality, commercial vacuum can cost as little as $200 or as much as $500 – but, you’ll want to purchase one that can handle multiple types of surfaces. Products such as mops, sponges, and disinfectants will vary by location. However, you should anticipate spending a minimum of $200 to get yourself started. If you choose to offer carpet cleaning services, your start up costs will increase significantly – as professional carpet cleaners can cost over $5000. So, make sure you set up a clear budget, and do a fair amount of research before investing.
In addition, you’ll need to invest in insurance. Because you’ll be entering client homes, it’s very important that you protect yourself against accusations of theft or damage by purchasing a Janitorial Bond. On average, a $5000 bond will cost about $100 a year for companies with 5 or fewer employees. Commercial property insurance will protect your expensive cleaners and other equipment from getting lost, stolen, or damaged. Small businesses usually pay $500 a year.
Depending on your needs and number of clients, you may want to consider subscribing to service business software – such as Jobber (min. $29 per month) or Service Fusion (min. $99 per month) – to help you schedule appointments, process credit card payments, and organize invoices.
How much do cleaning businesses make each year?
According to ZipRecruiter.com, the average cleaning business owner in the United States makes $55,949 per year. However, keep in mind that the annual revenue of a cleaning business depends on a variety of factors. Location, types of service (i.e.: residential vs. commercial), minimum wage requirements, and how much you charge will ultimately affect how much your business earns each year.
Owners in Washington state average a yearly income of $30,620; however, many businesses in Spokane, WA report a medium salary of $53,138. Florida is on the low end at $23,976. Although there are a few cities such as West Palm Beach and Saint Petersburg that are closer to $30,000. Cleaning businesses in Texas, Pennsylvania, and Colorado average somewhere in the middle (between $30,000 and $40,000).
How much should I charge?
House cleaning averages $25 to $50 per hour. Commercial spaces average between $70 and $120 – however, these prices can vary greatly as this type of service is geared towards public spaces (i.e.: retail stores, restaurants, schools, and churches). Most cleaning businesses will charge an hourly fee and/or a flat fee based on the type of cleaning service, number of rooms, or total square footage.
How do I determine my hourly rate?
Typically, new cleaning businesses will begin with an hourly pricing model. However, there are a few things you’ll need to think about before determining your fee.
- Overhead cost. This is the total amount it takes to run your business – including cost of supplies, travel time, fuel, and other monthly costs. Save all your receipts and use them to determine your markup.
- Cleaning time. It might sound odd, but it’s a good idea to have a sense of how long it takes you to clean a house, apartment, and specific types of rooms. Call your friends and set a timer!
- Other cleaning businesses. Scoping out your competitor’s prices will give you a sense for what clients may be willing to pay – it also allows you to make sure you’re staying relevant.
How do I determine my flat rate?
Let’s say, your hourly rate is $30, and it takes you 3 hours to clean a 1 bedroom/1 bath house. Your flat rate will be $90 ($30 X 3).
Calculating a rate for commercial cleaning will be more complicated. Because commercial spaces are often larger and have more foot-traffic, you may want to consider visiting the site BEFORE committing to a set fee. This will give you an idea of what tools you’ll need, how much time it will take, and the current condition of the space.
Select a Name for Your Cleaning Business
Have a great name idea? Before you start marketing and branding your business, you’ll need to ensure your name is available. Most states prohibit or restrict businesses from adopting names that are already in use. Even if it’s legally allowed, a copycat name puts your business at risk of a lawsuit.
See if your business name is available in your state with our Free Business Name Search.
Trademarks and Domain Names
Plan to trademark your business name? You can see if the trademark is available on a website like Trademarkia. It’s also a good idea to see if the domain name is available, which you can do on websites like Network Solutions and GoDaddy. Even if you don’t plan on putting together a website right away, you can buy the domain name to make sure no one takes it in the meantime.
Choose a Business Structure
Should you form an LLC? A sole proprietorship? Your choice of business structure will affect many aspects of your business, from liability to taxes.
Sole Proprietorships & General Partnerships
If you don’t file any paperwork to legally form a different kind of business—you have a sole proprietorship or general partnership. Essentially, these are “default” business structures. A sole proprietorship has one owner, and a partnership has multiple owners.
These structures have a few initial benefits. They’re easy, fast and cheap to start and maintain. However, the limitations and risks of these business structures quickly become more apparent as your business grows. In both of these business types, you are your business, legally speaking. Your company’s legal business name is YOUR name—so you’ll need a DBA to operate under any other name. Any business debt is YOUR personal debt. If anyone sues your business, they are suing YOU personally.
LLCs & Corporations
Limited liability companies (LLCs) and corporations are business entities formed at the state level. The entity is legally separate from its owners, meaning the owners are not personally liable for the debts and obligations of the business. As a separate entity, the business also has multiple tax election options. For example, both LLCs and corporations can choose to be taxed as S-corps if they meet the requirements.
LLCs and corporations are not quite as simple and inexpensive as default structures. LLCs and corporations come with formal requirements like state reports. They also have more fees than default structures, such as formation and annual report fees. However, the benefits of an LLC or corporation—especially liability protection and tax flexibility—are significant.
Legally Form Your Cleaning Business
If you opt for a sole proprietorship or general partnership, there’s no formal paperwork to file to legally create your entity—you just start selling your product or service. However, you will not have anyliability protections or tax flexibility.
LLCs and corporations are formed by filing paperwork with a state agency, typically the Secretary of State. To start an LLC, you file articles of organization. To start a corporation, you file articles of incorporation. In most states, you can file these forms online or download a paper form from the state’s website.
Whether you’re forming an LLC or corporation, your articles will require certain basic information about your business, such as your company’s:
- business address
- registered agent and office
- business purpose
- members/managers or directors/officers’ names and addresses
- number and type of authorized shares (for stock corporations)
You’ll also need the signature of someone authorized to sign on behalf of the business, along with the state’s filing fee. Fees vary by state but are typically between $100 and $200. If you hire Northwest to form your LLC or corporation, we complete and submit your formation paperwork on your behalf for just $100 plus state fees.
Create Internal Policies and Procedures
It’s important to put your company’s internal policies and procedures in a written document, especially if you’re starting your business with others. Partnerships have partnership agreements. LLCs have operating agreements. Corporations have bylaws.
These documents look a bit different for each kind of business, but they serve the same general purpose. They ensure there’s a clear path forward for any major issue that may arise, from changes in ownership to closing the business. LLCs and corporations also typically need an operating agreement or bylaws in order to open a bank account.
Get an EIN and Register for Taxes
Nearly all LLCs and corporations will need to request a federal employer identification number (EIN) from the IRS. If you file corporate income taxes, have employees, or file certain franchise taxes, you must have an EIN. An EIN is also a common requirement for opening a business bank account. Most businesses can request an EIN by filling out the IRS’s online form.
Your EIN is for federal taxes—but you’ll likely have state and local tax obligations as well. You will most likely need to set up an account with the state’s Department of Revenue, and you may need to apply for a state tax ID or a sales tax license as well.
Learn more about how to Get an EIN for your business.
Open a Bank Account
A business bank account keeps your personal finances separate from your business finances. For LLCs and corporations, keeping separate finances is essential for maintaining liability protection. To open an account, LLCs and corporations typically need to bring to the bank a copy of their articles, their operating agreement or bylaws, and their EIN.
Obtain License, Permits and Insurance
Many businesses will need a business license to operate. Licensing information—as well as any zoning requirements or other permits—can usually be found on the city or county website.
As mentioned earlier, insurance is also important for cleaning services. While LLCs and corporations protect you from personal liability, you don’t want your business to go bankrupt in the face of an accident, injury or other disaster. At minimum, it’s a good idea to look into general liability insurance. Here’s a quick breakdown of some policies you may want to consider:
- Janitorial Bonds: This will protect against accusations of theft or unsatisfactory work. These will average at least $100 a year.
- Commercial Property Insurance: Fancy vacuums, carpet cleaners, and their various attachments can get expensive. Protecting them against theft or damage can help you save money if disaster were to strike. Average cost is around $750 per year; however, some insurance companies will offer discounts if you bundle this with general liability insurance.
- Commercial Auto Insurance: This will help with the costs of auto accidents – especially if you or an employee is at fault. These polices can be pricey ($750 – $1200 per year).
Next Steps for Your Cleaning Business
After your business is up and running, there are a few additional steps you may want to take as you grow:
- Get online: With your domain name, you can create a business website. You can hire a professional or use a website-builder like Wix or WordPress. You may also want to invest in online ads through a program like Google Ads.
- Hire employees: Hiring employees requires quite a few steps. You’ll need to collect W-4s and I-9s from employees, report the new hires to the state, set up withholding, pay for unemployment insurance, distribute any required documents and notices to employees, and display wage and safety info in the workplace. Employer.gov is a good place to start, followed by your state’s tax or labor office.
How Do I Know if a Cleaning Business is Right for Me?
What’s it really like to work in a cleaning business?
There’s a lot of cleaning involved. And, while that might sound enticing, you need to remember that you’ll be doing it for several hours a day – making it physically draining and hard on your body. The job requires a lot of standing, bending, and stretching your limbs beyond their normal capacity. In addition, you need to manage client information, your daily schedule, business emails, new/repeat requests, and the company’s budget.
Yes! It’s a lot of work. But, you’ll also be creating a space where people feel safe and comfortable. Business and home owners will take pride in your work. In addition, many clients may not be physically able to spend an afternoon vacuuming carpets or scrubbing showers. You will offer so much more than clean counter tops – you’re serving your fellow human being.
What does it take to succeed in the world of cleaning?
Aside from having a deep love for streak-free glass cleaners and fancy wonder mops, you need to, as stated earlier, thrive on physical labor. Cleaning for several hours is very taxing on the body – so make sure you’re willing and able to maintain stamina. On top of that, you’ll need a strong eye for detail – no missing spots of dust, grease, or mold! Clients will expect you to be comfortable entering their homes, so you must build strong relationships with them (as well as their children, pets and neighbors). This means you have to be outgoing – even when you don’t particularly feel like it. Self-motivation will play a key role in determining how successful your cleaning business ultimately becomes.
Ready to Form an LLC or Corporation?
Northwest Registered Agent is here to help with all your small business ideas and needs. Answer a few simple questions about your business, and we’ll prepare and submit your formation paperwork to the state. We also provide your new business registered agent service, free business forms and guides, and much more.