A cleaning business is highly profitable and can churn massive money if done right. This post tells you what is to be done for starting a residential/commercial cleaning service.
Cleaning is a challenging task in most households. It can become tiring and tedious, right from making the bed to tidying up the carpet. The problem is particularly with individuals who work and are too exhausted to take up cleaning at the end of the day.
Most of us would joyfully hand over the cleaning job to an expert cleaner if given the opportunity.
This huge demand for proficient cleaning services has led to a meteoric rise in the number of cleaning businesses. As a result, the chance of succeeding in this vertical is quite high provided you establish one correctly.
Starting a small-scale cleaning business doesn't require any degree; the knowledge comes on its own as you spend more time running a cleaning service.
Setting A Budget
Business Structure
Taxation Of Your Cleaning Business
Naming Your Business
Organizing Your Finances
Insurance For Your Cleaning Business
Supplies For Your Cleaning Business
Rates/Models For Your Cleaning Services
Marketing For Your Cleaning Services
Online Marketing For Your Cleaning Business
Find The Right Customers
Hiring The Employees
Setting A Budget
The budget varies depending on the scale at which you want to start a cleaning business: residential or commercial. Most companies tend to start at the residential level and then transition to a commercial scale once the the systems, employees and a thorough understanding of the optimal cleaning procedures are in place. Companies offering commercial cleaning services at a large-scale are making millions of dollars in revenue every year.
On the residential side, you're looking at some basic permits and licensing depending on the state and the entity you want to start your cleaning service in. This could range anywhere from $50-$200 to get going. Basic insurance requirements range from $500/year to $3500/year if you are starting out. It depends on how many employees you have in your company.
The basic cleaning materials in products could range anywhere around $200-$600 based on how inclusive you want to be, and how much you want to cover right away. Initial advertising expenses would be around $300-$200 for a basic starter. This includes marketing materials like business cards, flyers.
The entry barrier is pretty low on the residential side of cleaning services. You could be looking at a few thousand dollars to get going depending on how intensive you want to be.
If you have the cash for add-ons, you can have a customized vehicle (instead of a plain, old van) and what not. Just like any other business, you bring in revenue, grow your business, invest in upgrades, and repeat.
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Business Structure
The next step is choosing the right structure for your cleaning business. The two basic business structures common used for a cleaning business are sole proprietorship and LLC. With proprietorship, it's cheaper and easier to get going. It's less complicated when it has to do with taxes. Your income and liabilities are tied directly with your venture.
So if something happens to the company or it's funds, you will have to bear the consequences. If you go the LLC route, there is a shield around the corporate entity that separates you from the entity. Thus, the company related liabilities are limited for you. The business has a separate bank account and separate income.
Taxation Of Your Cleaning Business
Understand how taxes work. The manner in which taxes are filed differs for LLC and sole proprietorship. In LLC, it becomes a bit complicated at the end of the year. You can either do the accounting on your own or hire a professional accountant to take care of the books.
No matter what, if you're running a business, having an accountant review your books and the year-end process will save you from headaches. If you have a good CPA (certified public accountant) to help you with the finances of your cleaning business, nothing like it.
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Naming Your Business
Owning a business with unique names and tag lines stand out and sound larger than they are. It helps a lot in the long run. In order to find a good name for your business, brainstorm around possible names that reflect your cleaning services' mission. Look up on the internet if you don't have anything to start with.
Come with an initial list of possible business names. After some time, look back at your list and cross out the poor ones. Ask friends and acquaintances to review the remaining names, get some feedback, and then finalize on one name which resonates with your cleaning business's objectives.
Organizing Your Finances
You need to have a business bank account. In order to get a business account while operating a LLC, you need to register for an EIN on the government website. You will also need your articles of incorporation which you will get after setting up the LLC.
If you have a bank account throughsole proprietorship, it will be under your name like any other bank account. However, it's important to separate your individual bank account from the business. This way, you will have an easier time tracking expenses, analyzing income, and understanding how the business is functioning.
Getting a business credit card is important; that way you can get the cash rewards. The next thing is a credit card processor. The easiest one to set up and use is "square" and takes 15 minutes to set up.
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Insurance For Your Cleaning Business
You don't need a large insurance plan you are setting up the cleaning business on a residential scale. But getting a bond and basic general liability insurance is essential. A bond is useful if someone pays for a service and doesn't receive that service.
A bond is like an assurance to the customers. Some customers like to see that the cleaning businesse they employe provides a bond. This isn't a requirement in every state. A bond is recommended because it helps in landing in high-paying and picky clients.
With commercial cleaning business, a higher level of insurance and bond is required.
Supplies For Your Cleaning Business
The sky is the limit when it comes to purchasing supplies for your cleaning business. If you have the cash to buy high-end, high-quality materials, then go ahead. If you can't, no issues! Purchase a few supplies while you start out, but don't compromise on quality. After all, you will be using these supplies day in and day out. It's not like the broom in your house which you use you know once a day or once in a week.
Here is a list of items that you need (at the very least) to get your cleaning business started. The list may be altered depending on the type of cleaning services you offer:
- A cleaning uniform with pockets.
- Window cleaner.
- Paper towels.
- Clothes.
- Latex gloves.
- Duster.
- Sponge.
- Scrubbing brushes.
- Vacuum disinfectants.
- Sponges and scours.
- Yellow sisters.
- Microfiber cloth.
- Mop.
- Bucket.
- Dustbin and brush.
- Protective gloves.
- A little plastic caddy to carry supplies.
- De-greasers.
- Oven cleaners.
- Bleach sanitizer.
- Laundry detergent.
Do not compromise on the quality if quantity is beyond your budget in the beginning.
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Rates/Models For Your Cleaning Services
For residential cleaning services, companies either charge an hourly rate or flat prices depending on the size of the home. Hourly rates are super simple. With an hourly rate, the customers not going to screw around on the price.Hourly rates for residential cleaning ranges anywhere from $40-$100. If you are looking at flat rates, it varies wildly.
The range depends on the frequency, type of cleaning required, and the size of the home. If it is a one-time cleaning, then bump up the flat rate price by around 35%. If it is an intensive clean, then increase the price by around 80% because of the efforts involved.
Successful companies take assignments on both residential and commercial scale. In case of commercial cleaning, you either charge on the hourly rate or depending on the square footage. Hourly rates fall anywhere between $40-$100 an hour for basic cleaning services. If you offer deep-clean services, special cleaning, or anything to do with hazardous materials, you could be looking at 50 per cent to 100 per cent more depending on the situation.
In order to be in the higher end, you need to offer the best cleaning services. And that means delivering the best in value cleaning options, different types of packages, a dedicated customer service to assist clients with any queries before and after the cleaning assignment, and so on.
The opportunity lies in the art of mastering customer retention. So if you do little thing like leaving a couple of chocolates on the bed, leaving a thank you note on the countertop, these customer service gems help in keeping new clients and work as free advertising at the same time.
Marketing For Your Cleaning Services
The famous one is offline marketing. So many people are spending their money on online advertising and ignoring offline strategies. However, the power of offline marketing is astounding. And how do you execute offline marketing strategies? By completing the cleaning assignments on time with excellent results. Happy clients will play their role through word of mouth publicity.
Little service gems will give them a reason to talk about your cleaning business. And that is the objective of a successful offline marketing campaign. It is pretty cheap when you compare it to how much it costs for one-click on Google, Yelp or Facebook.
Another form of offline marketing is flyering. Getting a creative business card and distributing it door-to-door in a decent neighbourhood is essential fir finding new clients.
To maximize your offline marketing reach, you should get in touch with real estate agents as they can tell you about people who are shifting houses. Moving into a new place means a potential cleaning assignment. Apart from this, target neighborhoods with substantial number of residents. Greater the homes, greater the chance of securing a cleaning job.
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Online Marketing For Your Cleaning Business
There are a few ways to do this. Some are time-consuming but are more effective. Some take less time but are expensive. So a great way to advertise online is with content marketing. Now, it takes a lot of time but if you put in the time, it will be worth the effort.
Share your cleaning success stories online by writing blog posts/articles and putting up genuine testimonials with rave reviews. You can also add videos for each article. Do you know about common pitfalls when it comes to cleaning one's home? Share it online! The aim is to rank high for organic searches on Google, Bing and other websites. If some searches for cleaning services in the location you function out of, your business should appear at the top of the search results. On-board SEO experts, content marketers, and writers to increase your ranking. Your digital presence must be strong.
Positions you as an expert in certain cleaning techniques and sub-domains. If you can clean stains that other cleaning business just can't get rid off, your customers should know. Like any other business, you need to specialize in something to stand out amongst rival cleaning businesses.
It allows you to charge a higher price, get better clientele and build business organically online. You can run online ads on Google, Yelp, and Facebook. There are so many people running ads for the exact same thing as you, who are constantly trying to outbid you. The competition is enormous.
Content marketing isn't the only way. You can sell DIY materials online so that people can handle minor cleaning hassles on their own. Start a weekly newsletter on cleaning tips and tricks. And use online marketing to expand your geography. Functioning out of a couple of locations won't bring in much revenue. Create business pages on Facebook, Twitter, and other social media platforms so that people can contact you through various mediums.
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Find The Right Customers
You will find that there are certain customers that take up all your time, money, and energy. And it's hard to make profits out of such people. On the other hand, there is a section of consumers who pay on time, pay more than the other customers, and are cooperative. Focus on this group and build a trustworthy customer base before thinking of expansion.
Focus on that key demographic that earns you the most money and fire everyone else.
This goes the same with your employees. Get rid of employees who slack off or those who are dragging down the company. On the other hand, encourage the few people who want to see the business succeed, who do great work. So focus on them and nurture such employees. Make sure they are appreciated and understood.
Hiring The Employees
Hiring the right employees is essential to creating a successful cleaning business. If you end up hiring employees and not being a solo enterprise, there's a lot you need to know on how to hire people, how to take care of them, and how to get rid of the poor ones. So spend a ton of time for finding the best people. Go for those who have some prior experience in the cleaning segment. Hire a few newbies as well so that you can train them to meet the business's objectives.
Your employment advertisement should detail everything you want in the employee; say things like, "we're looking for someone who is available these hours, who is extremely reliable, and is comfortable in being in people's homes." Whatever your requirements are, mention them.
Put the instructions on the application process. Remove any kind of ambiguity. If you plan to take a video call interview, the instructions should outline the conferencing app you will use.
Vet through the submitted applications carefully. Look for the answers because you will find a lot of people leaving certain sections in the application blank or having a snarky response to some questions. Put those people aside to remove the rotten apples. And then interview the remaining ones to your heart's contentment.
Author: Devashish Shrivastava
Source : https://startuptalky.com/how-to-start-cleaning-business/
Date : 2020-09-02T17:15:00.000Z