How to Start a Commercial Cleaning Business

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Quick Reference

While a cleaning business may make you think of housecleaning, the commercial cleaning industry also offers you the chance to build a profitable business. If you’re hard-working and meticulous about your work, starting a commercial cleaning business might be a rewarding opportunity. Best of all, you can start a small business with a smaller financial investment, then gradually grow your business into a multi-vehicle, large operation.

Business Overview

Commercial cleaning businesses help to keep commercial buildings and vehicles clean and, therefore, safe for use. A cleaning business may hold a contract with one large operation, providing all of their daily cleanings. The business may hold smaller contracts with multiple businesses, providing cleaning services only on certain days. Because many businesses require cleaning during non-business hours, it’s common for cleaning businesses to operate after 5:00 pm and into the night. Many businesses hire commercial cleaners from offices to apartment complexes to train stations and airports.

While a cleaning business can take a general approach to cleaning, it’s common for these businesses to specialize in certain areas. A business may specialize in certain aspects of cleaning, like floor care or window cleaning, while others may focus on residential cleaning, medical cleaning, or industrial cleaning. A business may offer maid services, sanitation services, or damage restoration cleaning, and these specialties often allow businesses to charge more for their services.

Industry Summary

According to IBIS World, the commercial cleaning and janitorial services industry experienced a 2.0% growth from 2014 to 2019. That growth was due to multiple factors. As corporate profits increased, businesses spent more on cleaning, leading to an increased demand for commercial cleaning services. Office vacancy rates also fell during that time, and with more offices and retail spaces in use, increased cleaning was needed. By 2019, the industry brought in $61 billion in revenue. A total of 870,916 businesses were in operation, and they employed 1,890,016 staff. Industry revenue is predicted to continue to increase from 2019 through 2024, thanks to a healthy economy.

Industry Trends

Many trends are shaping the commercial cleaning industry. According to K. Payne Contracting, as the demand for cleaning has increased, many companies have branched out and started to offer specialty services. Specialty services like upholstery cleaning, post-construction cleaning, and even property preservation allow companies to expand their offerings and make it easier for clients to access a variety of services.

Companies are also increasingly using smart equipment and technology, like robot vacuums, automated cleaners, artificial intelligence-powered window cleaners, and smart air systems. These devices require an initial investment, but they can make cleaning easier for staff and potentially increase productivity.

Like many industries, the cleaning industry is under pressure to offer eco-friendly and green options. Companies that embrace sustainable and eco-friendly cleaning methods can appeal to eco-conscious clients. This requires a shift away from harsh cleaning chemicals and an increased focus on more sustainable options. Employees will also need specialized training on how to use these new cleaning systems and products.

With more consumers relying on internet searches and online reviews when finding local service providers, cleaning businesses need to embrace this online culture, too. Websites, digital marketing, and social media are increasingly important and can help commercial cleaners secure additional clients.

Target Market

On a broad level, commercial cleaning businesses market to owners or managers of commercial spaces. Individual cleaning businesses may develop specialties, like focusing on hospital cleaning or transportation cleaning, to refine that target market.

Skills, experience, and education useful in running a commercial cleaning business

Starting a commercial cleaning business doesn’t require a business degree, but certain skills and experiences are valuable in starting and running this type of business.

Cleaning experience. A business owner who has firsthand experience working in the cleaning industry will be well-prepared for what to expect when working within this industry.

Knowledge of chemical safety and handling. Cleaning chemicals are harsh and harmful if misused, so previous knowledge of general chemical safety and handling procedures is valuable in this industry. Training and certification courses are available and are required for certain types of chemicals.

Attention to detail. Little details matter in cleaning and a business owner with attention to detail can ensure that jobs are done right.

Physical fitness. Cleaning is hard work, so physical fitness and strength will be an advantage and will make your daily cleaning work easier, too.

Management experience. Most commercial cleaners employ multiple staff. Experience in hiring, training, and managing staff is an important skill to have.

Customer service skills. A cleaning business owner will need to stay in contact with the property managers or owners and may need to troubleshoot issues and ensure that the business delivers quality service. Customer service skills are valuable.

Costs to Start a Cleaning Business

Costs to start a commercial cleaning business can be quite affordable and can be scaled up as most of the expenses are for equipment that could even be rented. A small, one-person business can cost $10,000 or more to start, while larger businesses may require an initial investment of $40,000 or more. Most of these costs center around cleaning equipment and vehicles, though buying a used vehicle can save money over the cost of a brand-new vehicle.

Common startup costs for a commercial cleaning business:

  • Cleaning equipment like vacuum cleaners, mops, brooms, buckets, brushes, sponges, etc.
  • Cleaning supplies like disinfectant, rags, towels, latex gloves, etc.
  • Uniforms
  • Vehicle(s)
  • Working capital to cover the first 3 – 6 months of labor costs, insurance, rent, utilities, etc.

Steps to Starting a Cleaning Business

Step 1: Write your Business plan

After coming up with the idea, the next step in starting your business should be to write a clothing line business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.

Related:
How to write a business plan
Free sample business plans

Step 2: Form a Business Entity

A business entity (sometimes called a legal entity or business structure) refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

Related: Comparison of Business Entities

Step 3: Name the Business

Finding the perfect name for a business can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.

Related: Tips and ideas for naming a cleaning business

Step 4: Select your Location

It’s possible to run a single-vehicle business right out of your home, but once you invest in multiple vehicles, it may be time to rent a garage or a storage building with a parking lot. Cleaning chemicals often need to be kept within certain temperatures, so you may need to look for an air-conditioned building or storage facility. Rental costs will depend on the type of property, its size, and location.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

A commercial cleaning business will need to obtain certain business licenses and permits, including permits and certifications for the cleaning chemicals used. These permits and licenses can vary based on the state and town where the business is located.

Additionally, there are some general local, state, and federal business registrations like a state sales tax permitEmployer Identification Number (EIN) with the IRS, and local Occupancy Permit.

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a cleaning business is another. In order to get a loan, the borrower(s) will need to have good credit and be able to personally invest 15-25% towards the total start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the business’s income and expenses.

Step 8: Get your Marketing Plan in Place

Now that you are getting close to opening, it’s time to get marketing materials planned and created. It’s important to understand your market and what media they consume so you can effectively reach out to them and let them know you’re open.

Set up your business listing on Google My Business, Angie’s List, and social media platforms like Facebook, LinkedIn, and Instagram, in addition to handing out business cards and flyers.

Related: Low-cost ideas to market a new business

Step 9: Get Business Insurance

A commercial cleaning business will need several different insurance policies:

  • General liability insurance protects the business if a client is ever injured due to the business’ work or equipment. This type of policy usually helps to cover expenses like medical bills and legal fees.
  • Commercial property insurance protects the business if its equipment or property is ever damaged or destroyed in an event, like a fire.
  • Commercial auto insurance offers protection if a business vehicle is ever involved in an accident.
  • Workers’ compensation insurance protects the business if an employee is injured while on the job, and it can cover expenses like lost wages and medical bills.
  • Janitorial Bond protects the customer if an employee commits theft or damages their property.

Many factors affect insurance policy cost, including the value of the business’ equipment and the value of its vehicles. To get the most accurate idea of insurance costs, it’s best to request quotes from multiple insurance companies. Then, compare the quotes, but don’t just look at the premiums. Instead, consider all of the factors, like differences in coverage limits, exclusions, and deductibles.

Related: Types of insurance your business may need

Step 10: Hire Employees

Most commercial cleaning businesses employ multiple staff. According to Indeed, janitors earn an average of $19.24 per hour, while those salaries can range from as little as $7.45 to as much as $35.45 per hour.

In addition to budgeting for employee salary costs, a business’ budget also needs to include other expenses like paid time off, health insurance contributions, and worker’s comp insurance.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your cleaning business is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up accounting for your business

 

How much can you potentially make owning a commercial cleaning business?

Many factors will affect the profits of a commercial cleaning business. Cleaning Business Boss reports that cleaning businesses can expect to make between $30,000 and $50,000 per year, though commercial cleaning businesses can potentially charge more for their services. Other factors include the years that a business has been in operation, the number of employees, any specialties that allow for increased sales, and the business’ profit margin.

Things to consider before starting a commercial cleaning business

Buying all of the equipment needed to do comprehensive commercial cleaning can be expensive, but it’s possible – and even advisable – to start a business on a smaller scale, then expand. Consider purchasing just what you need to do office cleaning, then later invest in additional more specialized equipment that allows you to expand your service offerings. By taking on smaller cleaning jobs initially, you’ll learn valuable lessons about your productivity and how to quote for projects before taking on larger, more demanding projects.

Be prepared to take on an active role in your company’s marketing efforts, too. Picking up the phone, following up with potential clients, and getting out in the community to introduce yourself to business owners are all important and effective marketing components. You’ll also need to be ready to back up your marketing with client testimonials and a professional bid package. The more effort you put into professionally presenting your business, the more likely you’ll be to secure additional clients.

 

Resources:
International Janitorial Cleaning Services Association
National Cleaners Association
The American Cleaning Institute

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