Are you considering starting your own home cleaning business but aren’t sure where to begin? Launching a residential cleaning company takes more than just having great cleaning skills – you also need to understand the realities of running a small business. This guide is here to help you get started by providing an overview of the business and the nuts and bolts of getting your own cleaning service off the ground..
A residential cleaning business involves providing professional cleaning services to clients in their homes. These services can range from basic tasks like dusting and vacuuming to more intensive deep-cleaning jobs. Often, customers hire house cleaners on a regular, recurring schedule.
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 between tenants.
There are many benefits to starting a house cleaning business, such as low overhead costs and the ability to set your own schedule. It’s important to note that this type of business can also be physically demanding and may require working long hours.
Related Business Ideas
The cleaning industry is a stable and often recession-proof sector. People always need cleaning services, whether for regular maintenance or special occasions. Your target market could include busy professionals, families, elderly clients, or landlords seeking move-out cleaning for rental properties. Deciding which of these markets to serve is a key part of starting your business. You might choose to be a generalist, offering a wide range of services, or you might find a niche that you specialize in.
The professional house cleaning industry brought in $12.5 billion in the United States during 20221. As more families and individuals have less spare time for domestic tasks, the demand for professional home cleaning services continues to grow. Busy schedules and changing lifestyle preferences provide ongoing business opportunities for those entering this market.
This growth is due to an increase in demand for cleaning services, as more households and businesses are outsourcing their cleaning needs. In addition, the ongoing COVID-19 pandemic has increased the demand for cleaning and sanitizing services. As a house cleaning business owner, you’ll be entering a growing market with plenty of potential for success.
In addition to growth in demand, there are several industry trends that are worth noting. One is the increasing demand for eco-friendly cleaning solutions. Consumers, particularly millennials, are becoming more conscious of the environmental impact of cleaning products and are seeking services that use environmentally friendly products and methods. Another trend is the growing demand for services from high-income households and the elderly population. As disposable incomes increase and the population ages, more people are seeking professional cleaning services. This trend is expected to continue, providing a larger pool of potential clients for house cleaning businesses.
Steps To Start A House Cleaning Business
Step 1: Research the Market
It’s easy to get revved up about the prospect of starting a business. The vision of being your own boss while raking in healthy profits can spark entrepreneurial enthusiasm. But before printing those first flyers or buying that expensive steam cleaner, it pays to validate whether a viable market actually exists for another cleaning provider in your area.
First, examine precisely who needs house cleaning services in your neighborhoods. While certain demographics like dual-income families and elderly homeowners are natural segments, dig into the numbers for your area. If higher earning households or retirement communities represent large portions, that’s a clue that services may be in demand. The Census Bureau website can offer demographic information specific to your area, helping you better understand your potential customer base.
Next, research cleaning companies in your area that are marketing to those target customer groups, including both independent cleaners and franchises. Find out what services they provide, how much they charge, and what customers say about them. If lots of companies offer the same service, you’ll need to bring something unique to the table to stand out.
Completing this type of research may seem like a big job. But this information will tell you if there’s a demand for a new house cleaning business in your area. More importantly, it will help you understand the needs of your potential customers to create a service that meets them, which can lead to a successful house cleaning business.
Step 2: Write a Business Plan
You’ve assessed the market opportunity in your area for an additional residential cleaning provider, and it looks like there is an opportunity for your business. The temptation at this point may be to rush straight into printing brochures and buying equipment, but taking some time to map out your direction in a business plan is time extremely well spent. A cleaning business may feel straightforward, and many people underestimate the importance of having a plan, but it’s a step that should not be skipped. Here are a few reasons why.
For starters, a business plan takes your initial business idea and transforms it into a concrete plan of action. Do you plan to offer general cleaning services or specialize in certain areas? How much will you charge for your services? Who are your potential customers? By answering these questions in your business plan, you gain a clear understanding of what you want to achieve. It’s one thing to have an idea; it’s another to outline specific steps to make it a reality.
Another important aspect of your business plan is your marketing and sales strategy. How will you attract customers to your business? How will you convince them to choose your services over those of your competitors? And once you’ve won them over, how will you ensure they stick around? Your business plan should outline your approach to marketing, selling, and customer service.
Finally, your business plan can help you assess the financial viability of your business idea. By creating financial projections, you can estimate your costs and revenue, giving you a clearer picture of your expected profitability. If you’re seeking funding for your business, lenders usually require one to see that you’ve done your homework and you have a solid plan for making your business profitable.
Related: How to write a business plan
Step 3: Source Funding
Starting a house cleaning business is no small task, and one of the initial steps is securing funding. While you might feel ready to roll up your sleeves and jump into action, it’s important to understand the different funding options and ensure you have access to the funds, as funding is a common roadblock to starting a business.
Many house cleaning entrepreneurs start their businesses using their own personal savings, especially when initial expenses are modest. This approach has the advantage of avoiding debt, though it’s not always possible for everyone. Using personal savings can be a straightforward way to get your business off the ground.
For those who need more substantial funding, traditional bank loans are a common option. This option requires a solid personal credit history, collateral, and a business plan to be considered. In some cases, Small Business Administration (SBA) loan guarantees are needed. An SBA loan guarantee is when the bank provides the funding, while the SBA guarantees a portion to reduce the bank’s risk.
Business credit cards are a convenient, though potentially costly, method of financing. They offer quick access to funds but typically come with high-interest rates. They should be used cautiously and only for short-term funding needs. Personal credit cards are another option, but using them can have implications for your personal credit score.
For homeowners, a Home Equity Line of Credit (HELOC) allows you to tap into the cash value built up in your home’s equity. This can be an effective way to access funds, often with more favorable terms than credit cards. However, it’s only a viable option if you have sufficient equity in your home.
Another approach is to seek investments from friends and family. This route is based more on personal relationships than on strict business metrics. While it can align interests and provide a more flexible funding route, there is a risk of straining personal relationships if the business encounters challenges.
For smaller funding needs or when traditional lending options are not a fit, microloans can be a practical alternative. These loans are often provided by local economic development organizations, and some even offer business training in addition to funding.
Step 4: Register the Business
Starting a house cleaning business requires careful consideration of various legal aspects to ensure it’s properly registered and compliant with state and local regulations. The requirements might vary depending on the state you’re operating in, but here are the main aspects to consider:
Business structure: The first step is deciding on a business structure. This determines how your business is organized, taxed, and the owner’s personal liability. There are four main types of structures:
- Sole proprietorship: This is a common structure for small businesses like house cleaning services due to its simplicity and lower cost. It’s easy to set up and manage, but it offers no personal liability protection, meaning your personal assets could be at risk if your business is sued.
- General partnership: Similar to a sole proprietorship but for two or more people running the business together. It’s straightforward to start, but like a sole proprietorship, it doesn’t offer liability protection.
- Corporation: This structure offers strong liability protection, as the business is a separate legal entity. However, it’s more complex, costly, and involves more administrative requirements.
- Limited Liability Company (LLC): Combines the ease of a sole proprietorship or partnership with the liability protection of a corporation.
Related: Comparison of business structures
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:
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Business name registration: After registering the business structure, you may need to register your business name. This process will vary depending on what business structure you pick. Sole proprietors and partnerships will often be required to register a “Doing Business As” (DBA), while corporations and LLCs register with the state during the formation process.
During this time, it’s also a good idea to check if the name you want is available as a web domain, even if you’re not ready to set up a website yet.
Obtain business licenses and permits: While house cleaning businesses don’t usually require specialized licenses, you often need a general business license and seller’s permit to operate. This requirement varies by location, so check with your city or county office.
Step 5: Set Up Operations
The next step is to establish your operations so that you can hit the ground running.
Unlike many businesses, a house cleaning service doesn’t necessarily require a physical storefront. Since the work is performed at the client’s location, the primary need is a space to store cleaning supplies, equipment, and possibly an office for administrative tasks.
This could be a home office or a small rented space. As your business expands, you might eventually consider renting an office space to facilitate operations and accommodate employees. If working from home, designate a specific area for inventory, like a garage or a spare room, ensuring it is organized and secure. Also, some residential areas are not zoned for commercial businesses, so if operating from home, double-check with local authorities to ensure your cleaning business won’t violate any zoning regulations.
In addition to a physical space, you’ll need to invest in any cleaning equipment like vacuums, mops, dusters, cleaning products, protective gear for staff, uniforms, a company car or van for transportation between jobs, and more. Ensuring OSHA workplace safety standards2 regarding the use of chemicals is also important, as some are dangerous to handle.
Lastly, technology also plays a large role by allowing house cleaning businesses to automate many time-consuming tasks. With software like Jobber or Housecall Pro, clients can schedule their own bookings online, saving scheduling and phone call time. These systems also accept online payments for services, which 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.
Step 6: Hire Cleaners
Many house cleaning businesses only operate with the owner, but once client demand grows beyond what you can handle solo, hiring employees may become a necessity. Before you can start hiring, there are some legal requirements you’ll need to meet.
First, you’ll need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is used for tax purposes and is required for reporting information about your employees. Next, you must verify the employment eligibility of your hires. This involves ensuring all employees are legally allowed to work in the United States, typically verified through Form I-9.
Each state has its own hiring requirements, so you’ll want to review these. Some states have unique labor laws and minimum wage rates that you’ll need to observe. In most states, workers’ compensation insurance is not optional. This insurance supports employees who get sick or injured on the job by covering their medical expenses and a portion of their lost earnings.
Finally, you will need to be familiar with labor laws. These laws guide everything from minimum wage laws, overtime rules, non-discrimination policies, and ensuring a safe work environment.
Step 7: Prepare to Launch!
Starting a house cleaning business involves a range of steps, and while we’ve covered many of the core aspects, there are still several important elements to consider. These will vary by business owner, but here are some common ones.
Business insurance: This could include general liability insurance, property insurance, and, if you have employees, worker’s compensation. Insurance safeguards your business against unforeseen incidents, accidents, or legal challenges.
Setting up bookkeeping: This involves setting up accounting software and systems to handle daily transactions, manage taxes, and prepare financial statements. Popular software choices include Wave Accounting (FREE) or Quickbooks. These tools help track revenue, expenses, and profitability.
Contracts: Prepare relevant contracts such as service agreements with clients, outlining the scope of work and payment terms to protect your business interests. RocketLawyer and Law Depot have free and inexpensive templates that may be helpful.
Opening 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.
Create a marketing strategy: A key to success is letting people know about your service. Develop a logo, create a website, and use other advertising channels to generate customer attention.
Common Questions When Starting A House Cleaning Business
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 investment, making it a highly accessible business for many entrepreneurs with limited budgets. It’s typically possible to start a house cleaning business for as little as $1,000 to $6,000, assuming the business owner already has a vehicle that can be used for business purposes.
Common startup costs include:
Equipment and supplies: The most significant initial expense is usually for equipment and cleaning supplies. This can range from $300 to $2,000, depending on the quality and quantity of the equipment. Essential items include vacuums, mops, buckets, cleaning solutions, and cloths. The cost can be higher if you opt for specialized or high-end equipment.
Insurance: The initial cost for insurance, including liability and, if applicable, worker’s compensation, can range between $500 and $1,200. This cost varies based on coverage amounts and specific business needs.
Business registration: Registering your business, which may include fees for forming the entity and obtaining necessary licenses, typically costs between $50 and $500.
Marketing: Initial marketing costs, which might include website creation, business cards, and flyers, can range from $100 to $2,000. While digital marketing can start at a lower cost, more extensive marketing campaigns will increase this budget.
Location setup: If you decide to rent a physical office space or storage area instead of working from home, you’ll need to account for rent and initial deposit costs. These costs will vary widely depending on your location and the size of the space you need.
Every business is unique, and these costs are estimates that can give you a general idea of what you might expect to invest.
How profitable is a house cleaning business?
The profitability of a house cleaning business can vary based on several factors, including location, pricing, services offered, and operational efficiency. Let’s explore a hypothetical scenario to estimate potential profitability.
Assume that the average rate for house cleaning services is between $180 and $230 per house. If a business owner gets 10 houses per week and charges an average of $180 per house, over a month, assuming four weeks (to account for some time off or seasonal fluctuations), this translates to a monthly revenue of $1,800/week x 4 weeks = $7,200.
Next, we’ll factor in monthly expenses. If expenses (including supplies, fuel, marketing, and miscellaneous costs) average around $800 per month, we can subtract this from the monthly revenue for a net profit. So, the monthly profit before taxes would be $7,200 – $800 = $6,400.
Annually, this would amount to $6,400/month x 12 months = $76,800 before taxes.
This scenario assumes a steady flow of clients and consistent operational costs. However, actual profits can vary based on additional factors such as the number of employees, if any, operational efficiency, seasonal fluctuations in demand, and the business’s growth over time.
What skills are helpful 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.
How much should I charge for my cleaning services?
When determining how much to charge for your cleaning services, it’s important to consider several factors.
To figure out your pricing, research what other cleaning service providers in your area are charging. This will give you a general idea of the going rates and help you determine a competitive price point. Keep in mind that your rates should align with the quality of service you offer.
There are three ways most cleaning services will quote work:
– By the hour
– Flat rate
– Square footage of the area being cleaned
Next, consider the specific services you provide. Are you offering basic cleaning or more specialized services like deep cleaning or eco-friendly cleaning? The complexity and time required for each service should be reflected in your pricing.
Additionally, take into account the level of competition in your area. If there are many other cleaning service providers, you may need to offer competitive rates to attract customers. On the other hand, if there’s limited competition, you may have more flexibility in setting higher prices. Homejoy and Amazon Home Services provide some localized benchmark pricing. You can always adjust rates once established as you evaluate your profitability.
Last, factor in your desired profit margin. Consider your business expenses, including labor costs, drive time, cleaning supplies, transportation, and overhead. Regardless of what the competition charges, be sure to calculate your pricing to verify that you will cover these costs and generate enough profit to make this business worth your time.
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.