How to Start a House Cleaning Business
Some people find cleaning their houses satisfying and take pride in the results of a clean, presentable home. If you’re one of those people, then starting a house cleaning business can allow you to capitalize on your cleaning enjoyment and talents. House cleaning businesses offer many advantages. You can start them entirely on your own, and there are minimal startup costs. As your business grows, you can hire staff and continue to increase your profits. Cleaning houses is hard work, but when you’re building a profitable business, it can be a highly rewarding opportunity.
It may be tempting to try to offer a wide variety of services, like carpet cleaning, window cleaning, pool cleaning, and more, especially when you’re just starting. But, this can cause you to spread yourself too thin, and if you can’t do all of these services well, you’ll risk jeopardizing your reputation. Instead, focus on a handful of services that you can do well and that are in-demand in your area.
House Cleaning Business Overview
House cleaning businesses provide customers with convenience and much-needed service to keep their homes safe and presentable. House cleaners typically perform basic cleaning services, like dusting, vacuuming, mopping, bathroom cleaning, kitchen cleaning, and taking out the garbage. Businesses may also offer additional specialized tasks like laundry, dishes, window washing, and more.
Often, customers hire house cleaners on a regular, recurring schedule. House cleaners may charge by the hour or may set a flat fee to clean the entire house. Most house cleaners will arrive with their own equipment, including cleaning products, though customers may choose to request eco-friendly cleaning products.
Typically, house cleaners work with a variety of customers who are homeowners or renters. House cleaners may also offer their services to apartment owners or AirBnB properties that need to be cleaned in between tenants.
According to Allied Market Research, the cleaning services market continues to grow. The market, which includes various commercial and residential services, is expected to grow by 6.2% and be a $74,299 million industry by 2022.
This growth is due to many factors, including the increase in disposable income from 2015 to 2020. The recent years have also seen an increase in construction, making for more homes that need cleaning services. Additionally, with more women working out of the home, more families are hiring house cleaning company.
The house cleaning industry is evolving, thanks to many current trends. According to Podium10, eco-friendly cleaning is becoming more popular, so businesses need to embrace green cleaning products and services. Many cleaning products can be harmful to the environment, and eco-friendly homeowners are increasingly seeking cleaners who use eco-friendly cleaning products.
Technology is also playing a large role in the house cleaning industry. Improved technology allows house cleaners to automate many time-consuming tasks. With a well-designed website, clients can schedule their own bookings online, saving scheduling and phone call time. Accepting online payments for recurring services eliminates invoice creation and saves time and frustration in tracking down payments. Apps and programs can even send out automated appointment reminders, saving the cleaning business owner time on the phone.
With all of this technology comes a greater responsibility to provide excellent customer service. House cleaners can use apps and programs to connect with clients more promptly and easily than before. Online social media and website chat systems allow customers to get information immediately. Online quote request systems can help streamline the quote process, and adding booking buttons into social media and a website can encourage customers to sign up right away.
A cleaning business’s target market includes people who are busy and have limited time for cleaning and who are looking for convenience in maintaining their homes.
The primary target market for a house cleaning service tends to be higher-income households (defined as earning over $100,000 annually) as they usually have larger homes and more disposable income. A secondary market is older homeowners who are not interested or able to do household chores.
Skills, experience, and education useful in running a house cleaning business
Starting a house cleaning business doesn’t require a business degree, but certain skills and experiences are valuable in starting and running this business.
Physical fitness and endurance. Cleaning houses is a physically demanding job, and a business owner will need to be strong and have good physical endurance.
Attention to detail. A business owner will need to pay attention to all of the details that go into every cleaning job to ensure that they perform the quality work that customers expect.
Customer service skills. Interacting with customers, both over the phone and in their homes, is a significant part of running a cleaning business. Previous customer service experience will be an advantage.
Time management skills. A good house cleaner needs great time management skills to maximize their efficiency and ensure they arrive at each house on time.
Management experience. When it’s time to hire additional house cleaners to expand the business, experience in hiring, training, and managing staff will be helpful.
Checklist for Starting a House Cleaning Business
Starting a house cleaning business can be an incredibly rewarding experience, but it’s important to make sure you’re prepared for the challenges ahead. Use this checklist to help get your business off on the right foot.
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
Step 2: Form a Business Entity
A business entity 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.
When deciding on which business entity is best for a house cleaning business, it normally comes down to the sole proprietorship and Limited Liability Company.
A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.
That leaves the sole proprietorship and LLC.
The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.
Related: 3 steps to forming your LLC
Forming an LLC sounds complicated and expensive, but using an entity formation service guides you through the process so you know it was done right.
Some popular LLC formation services include:
IncFile - $0 plus state fees & free registered agent for 1 year!
IncAuthority - $0 plus state fees & free registered agent the first year!
ZenBusiness - $49 plus state fees & free registered agent for 1 year!
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.
Step 4: Select your Location
Many house cleaning businesses can be run right out of the home. If a business expands to encompass multiple employees and vehicles, it may be necessary to rent an office. Rental costs will vary depending on the property’s location, size, and amenities.
If the business will be operated out of your home, be sure to check local covenants or landlord restrictions.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
No special licensing is required to start a home cleaning business; however, general business licenses, permits, and registrations vary depending on where the business is located, such as a sales tax permit and Employer Identification Number (EIN).
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 house cleaning business is another. Fortunately, many new house cleaning businesses can start without a loan when starting small. Still, for those who want to purchase specialized equipment, vehicles, or cash to hire employees, funding is an option.
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.
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
Marketing is important not only when starting a business but also in bringing in new customers. Common marketing techniques include setting up a website, Facebook business page, print advertising, handing out business cards, door hang flyers, advertising in the local paper, and direct mail advertising. Establishing a referral program can also encourage current customers to refer their friends and family, building up a customer base.
Every business is going to need a logo. Make a professional logo in no time with the free Canvaa logo maker!
Step 9: Get Business Insurance
A house cleaning business will need several types of insurance to ensure the owner is covered financially against lawsuits.
– General liability insurance helps to protect the business if a customer’s property is damaged or if the customer is injured due to the business’ work or equipment.
Janitorial bonds protect the homeowner should an employee commit theft while on the job. Many customers will expect you to have this insurance.
– Commercial property insurance protects the business if its property or equipment is damaged or destroyed in an event like a fire.
– Commercial auto insurance helps cover the expenses resulting from an accident involving the business’ vehicle.
– Worker’s compensation insurance can cover expenses like lost wages and medical bills that may result if an employee is ever hurt while working.
Your insurance policy cost will vary depending on factors like the business’s location and the number of employees on staff. To get the most accurate idea of how much to budget for insurance, request quotes from multiple providers. When comparing the quotes, don’t just consider the differences in premiums, but also look at how factors like coverage limits, exclusions, and deductibles compare, too.
Step 10: Hiring Employees
While a business owner will often start a house cleaning business and be the only employee, at some point, it will be necessary to hire help. Finding quality help can be challenging and time-consuming, since wages are typically low and the work demanding, so consider the types of perks that your business can offer to attract quality help who will represent the business well. Raises, bonuses, and other financial incentives may encourage employee loyalty and dedication to the work and business.
Develop a thorough interview and applicant evaluation process to help identify the best applicants for the job. Consider running a background check on all employees you hire, building customers’ confidence in your business and your employees.
In addition to budgeting for labor costs, a business will also need to budget for other expenses that come with hiring staff. The business may need to cover 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 residential cleaning business is critical to your business’s long-term success.
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.
The thought of accounting can be intimidating for a lot of new entrepreneurs. There are a number of ways of handling bookkeeping, from DIY to hiring a bookkeeper. These include:
- Pen and paper - Low expense, but difficult to track.
- Spreadsheet - Low expense, but easy to make errors.
- Accounting software - Medium expense, but owner typically inputs expenses. Some great accounting software programs include Freshbooks or Wave Accounting.
- Hire a bookkeeper - Higher expense, though very affordable at $100-$200 per month in most cases. A dedicated bookkeeper will probably save money because, in addition to handling all of the bookkeeping (so you can focus on the business), they also provide personalized tax advice and ensure the business is in compliance.
Find bookkeepers in your local area or use a service like 800Accountant.
How much does it cost to start a house cleaning business?
One significant advantage of starting a house cleaning business is that it requires minimal startup costs, making it a highly accessible business for many entrepreneurs with limited budgets. It’s possible to start a house cleaning business for as little as $2,000, assuming the business owner already has a vehicle that can be used for business purposes.
How much does it cost to start a house cleaning business?
– Cleaning supplies such as paper towels, rags, disinfectants, latex gloves, window cleaner, etc.
– Cleaning equipment such as vacuum cleaners, scrubbing brushes, mops, brooms, buckets, dusters, etc.
– Vehicle or another mode of transportation
How profitable is a house cleaning business?
The profits of house cleaning businesses vary depending on the business’s location, whether it’s a full-time operation, competition, services offered, and rates.
There are three ways most cleaning services will quote work:
– By the hour
– Flat rate
– Square footage of the area being cleaned
Maid Services of America reports that businesses charge between $80 and $120 to clean an average American home. Assuming a business charges $100 per home and cleans five houses per day, that business would earn $2,500 per week and $125,000 per year. By hiring additional employees and carefully marketing the business, a house cleaning business could clean more houses and earn higher profits.
Since labor is typically the highest expense for a house cleaning business, and many states are increasing the minimum wage over the next several years, be sure you are charging enough to still make a profit.
Be prepared to turn down potential jobs, too. With experience, you’ll learn to identify customers that can be extra demanding or difficult, and that can cost you time and profits. You’ll also develop your quoting skills so you can make sure that every job you take on increases your profits and is worth your time.
Are there grants to start a house cleaning business?
It’s extremely rare to find a grant to start a house cleaning business. If you search for business grants, you will come across a lot of scams and misinformation. Occasionally an organization will offer grants to start a business, however, be skeptical and don’t provide any sensitive personal information or pay money to get more information.
Legitimate federal grants can be found at Grants.gov and you can check on your state’s economic development office to see if they have any grants available.
What is the NAICS code for a house cleaning business?
The NAICS code for a house cleaning business is 561720, which also includes building cleaning, janitorial, office cleaning services, window cleaning, maid services, and more.
The NAICS code (North American Industry Classification System) is a federal system to classify different types of businesses for the collection and reporting of statistical data.