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How To Start A Parking Lot Cleaning Business

How To Start A Parking Lot Cleaning Business

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How To Start A Parking Lot Cleaning Business

How To Start A Parking Lot Cleaning Business

Starting a business often brings together dreams, aspirations, and hard work. If you’re considering diving into the world of parking lot cleaning, you’re tapping into an industry with significant potential and consistent demand. Even better, this small business can be started with a minimal investment, operated on the side, and doesn’t require specialized experience.

In this guide, we provide you with a bird’s-eye view of the parking lot cleaning business, crucial steps to get started, and answers to prevalent questions.

Business Description

Parking lot cleaning businesses mainly operate locally, keeping parking areas for apartment complexes, malls, shopping centers, garages, government and public buildings, industrial facilities, and even motor home parks tidy and safe.  And let’s face it if you are out shopping or are exploring parking options at a new apartment complex, first impressions count. You’re far more likely to opt for a garage or parking spot that looks well-maintained and tidy – that’s why this service is in demand.

These services may also provide emergency cleaning, ensuring that spills don’t pollute the stormwater. This type of business may also operate at night when public car parks are empty and be on-call 24/7 for emergency call-outs. 

Industry Summary

Parking lot cleaning services are grouped within the street cleaning services industry. The industry encompasses private companies that provide driveway, street, parking lot, and other asphalt cleaning and maintenance services. Their customer base can broadly be divided into government/ municipalities and private businesses.

Did you know that for every car, there are an estimated eight parking spaces in the US? I didn’t either, and with that many parking spaces, it shouldn’t be a surprise that the industry generated $2 billion in sales in 2021 (the most up-to-date available report) and is forecasted to increase by 1.6% annually through 2026.

This relatively moderate growth is due to the government increasingly funding their own services, an expected reduction of new parking spaces, and a struggle to expand car lot sweeping services beyond a local area. On the other hand, the industry continues to see growth in business and industrial customers outsourcing the maintenance and cleaning of their car parking facilities. 

One of the emerging trends in the parking lot cleaning business is the increasing focus on environmentally-friendly practices. As consumers and businesses become more conscious of their environmental impact, there’s a growing demand for cleaning services that use sustainable methods and products. Another trend is the use of technology to streamline operations, such as scheduling, invoicing, and customer communication. Embracing these trends can give your business a competitive edge.

Target Market

Your target market should include any commercial property management company, property owners of office buildings, retail stores, grocery stores, car dealerships, fast food parking lots, government agencies, and municipal and public services with dedicated parking spaces. We also recommend maintaining good relations with developers to support your bids for new contracts. 

Checklist To Start A Parking Lot Cleaning Business

Starting a parking lot 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: Assess the Market

Market research should be the first start in starting any business, and that includes a parking lot cleaning business. It helps to minimize risks, better understand the competitive landscape, and validate whether there is sufficient demand for your services. Without this step, you may invest time and resources into a business that does not have a viable customer base.

To research whether there’s enough demand for a parking lot cleaning business, here are some tips:

Identify potential customers: Identify target customer segments like property managers, commercial real estate companies, retail centers, etc. Drive around assessing parking lot cleanliness at potential client properties. Dirty, litter-strewn lots signal opportunity. With this list, you have a very targeted list of potential customers to reach out to.

Also, talk with managers of well-maintained parking facilities and commercial properties to assess their cleaning needs, current providers, satisfaction levels, and how much they pay if they use a service.

Analyze competitors: Look at existing parking lot cleaning businesses in your area. How many are there? What services do they offer? What are their prices? This research can give you an idea of the market saturation and help you differentiate by identifying potential gaps in the market.

Connect with local Chamber of Commerce & economic development offices: These institutions often have data on local businesses, commercial properties, and upcoming projects. They can provide a pulse on local economic conditions and growth trajectories.

Social listening: Monitor social media and online forums for discussions about parking lot cleaning. This can help you gauge public opinion and identify potential customers.

By conducting thorough market research, you can ensure there’s a sufficient customer base for your parking lot cleaning business. This step can save you from costly mistakes and increase your chances of success. Remember, knowledge is power when it comes to starting a business.

Step 2: Write a Business Plan

Starting a new business can be an overwhelming task, and one way to help organize all of those thoughts is by creating a solid business plan.

A business plan is commonly thought of as something needed before going to a bank, but it offers a lot of additional value. It’s like a blueprint for building a house – without it, you may end up with a structure that doesn’t quite fit your needs or expectations.

One of the key reasons to write a business plan is to organize your thoughts and ideas. The process of writing a business plan forces you to think through every aspect of your business, from your target market to your competition, to your marketing and sales strategy. This can help you identify potential challenges and opportunities, and develop effective strategies to address them.

Though time consuming, completing a thorough business plan forces critical thinking and provides a helpful guide as you launch your parking lot cleaning company.

Related: How to write a business plan

Step 3: Register the Business

Starting a parking lot cleaning service involves several steps to ensure it is legally registered and compliant with all necessary regulations. While the specifics can vary from state to state, there are some general steps and decisions that every entrepreneur should take into account:

Form a business entity: You need to decide on the legal structure of your business. The four main types of business structures are sole proprietorship, partnership, Limited Liability Company (LLC), and corporation.

  • Sole proprietorship: This is the simplest form of business entity. It is easy and inexpensive to set up, and it gives you complete control over your business. However, it does not offer any personal liability protection, meaning your personal assets can be at risk if your business is sued.
  • Partnership: This can be suitable if you are starting the business with one or more partners. Like a sole proprietorship, it is relatively easy and inexpensive to set up, but it also lacks personal liability protection.
  • Limited Liability Company (LLC): An LLC offers personal liability protection, which means your personal assets are protected if your business incurs debts or liabilities. It is more complex and costly to set up than a sole proprietorship or partnership, but it can be worth the additional effort and expense for the added personal liability protection.
  • Corporation: This is the most complex and typically most expensive business entity to set up. Like the LLC, it is a separate legal entity from its owners (or shareholders), and it provides liability protection and can raise money by selling shares of stock.

Most sweeping services in the US are nonemployers or sole proprietorships, servicing their contracts with a low-cost sweeper rather than an expensive, large cleaning truck.  

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:

IncFile - $0 plus state fees & free registered agent for 1 year!

ZenBusiness - Best for beginners. $0 plus state fees & free registered agent for 1 year!

Northwest - Best privacy protection. $39 plus state fees & free registered agent for 1 year!

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.

Related: Finding a domain name for your business

Obtain business licenses and permits: Depending on your location, there will likely be a variety of general licenses or permits needed before opening. This could include a business license, seller’s permit, and Employer Identification Number (EIN).

If you will be using regulated chemicals and cleaners, additional licensing may be needed before starting your business to avoid any potential legal issues.

Related: State guides for general business licensing

Step 4: Purchase Equipment

Starting a parking lot cleaning business can be as simple as purchasing basic cleaning tools or as advanced as investing in specialized equipment. The scale of your initial investment in equipment can depend on your available funds, the size of the lots you’ll be cleaning, and the level of cleanliness required by your clients.

For those starting small or on a budget, a basic set of tools like a broom, dustpan, garbage bags, and a bucket can be sufficient. These tools will allow you to handle basic cleaning tasks such as sweeping debris, picking up trash, and maintaining a clean appearance for the parking lot.

As your business grows and you take on larger jobs, you may want to invest in more advanced equipment to increase efficiency and effectiveness. This could include power sweepers, pressure washers, line striping machines, and even magnetic sweepers for removing metal debris.

Don’t forget to invest in safety gear, especially if you’re using chemicals or heavy machinery.

If you are able to get a big contract that requires specialized equipment that would only be used occasionally, consider leasing or renting that equipment. This way you can scale up equipment gradually as the business grows.

Step 5: Create a Marketing Strategy

If you want to attract clients for your parking lot cleaning business, it’s important to have a clear and compelling message.

First, determine what sets your business apart from the competition. Maybe you offer eco-friendly or chemical-free cleaning options or quick turnaround times for busy parking lots. Once you have your unique selling proposition, incorporate it into all of your marketing materials, including your website, social media pages, business cards, and flyers.

Online marketing is a powerful way to promote a parking lot cleaning business. Beyond claiming your business on Google Business Profile, ensure a presence on other online business directories like Yelp, Angie’s List, and the Yellow Pages. A well-designed website showcasing your services can make a great first impression for prospective customers researching online, especially when adding client testimonials and before-and-after photos. Social media platforms, especially visual ones like Instagram, are another effective way to showcase your, highlighting the transformation of dirty lots into clean spaces.

Consider offering specials or discounts for new clients as an incentive to try out your services. Also, networking and sending direct mail to property management companies and building owners in your target market can also help generate leads and land contracts.

To help with branding and giving your business a professional appearance, you can purchase uniforms or branded clothing and put signage on company vehicles so they can act as moving billboards for your business.

Last, joining the local Chamber of Commerce can be beneficial. It offers networking opportunities and builds trust and recognition among other business owners.

Related: Low-cost ideas to market a new business

Step 6: Prepare to Launch!

After addressing the major steps of starting your parking lot cleaning business, there may be a few steps left. Every business will have different needs, but here are some of the common tasks you might need to address:

Business insurance: It’s important to protect your business with the right insurance. General liability insurance can cover costs associated with accidents or damages that occur while providing your services. In addition, you may be required to obtain workers’ compensation insurance if you have employees. Also, even though you may already have auto insurance, it won’t typically cover a loss if the vehicle is being used for the business.

We recommend getting at least three insurance quotes, including local insurance agents and online providers like Coverwallet or Hiscox to get the best coverage and price.

Bookkeeping: Good financial management is key to the success of any business. Set up a bookkeeping system to track income, expenses, and taxes. You can use software like Wave Accounting (FREE) or Quickbooks, or hire a professional accountant.

Contracts: Draft clear contracts for your services. These can include specifics for one-time cleanings, regular parking lot maintenance, or annual service agreements. Make sure you detail the scope of work, pricing, duration, and any other relevant terms.

RocketLawyer and Law Depot have free and inexpensive templates that may be helpful.

Business bank account: Open a separate bank account for your business to keep your personal and business finances separate. This will make it easier to manage your books and file your taxes.

Hiring: If you plan to hire employees, develop job descriptions, establish pay rates, and set up a payroll system. Be sure to understand the labor laws in your area.

Management software: Consider using industry-specific management software to streamline your operations. For example, Jobber offers features for field service businesses like parking lot cleaning, and ServiceTitan is a comprehensive field service management software.

Pricing: Determine your pricing structure. You can charge per hour, per square foot, or per job. Research your local market to see what competitors are charging and to make sure your prices are competitive but also profitable for your business.

Credit card processing: Setting up a system to accept credit card payments can make it easier for your customers to pay for your services. Companies like Square or Stripe offer simple solutions for small businesses.

This material is property of StartingYourBusiness.com

Greg’s Tip: Thoroughly analyze your costs, time, and market rates. While competitive pricing can be a strategy to enter the market, it shouldn’t lead to losses.

Greg's Business Tip

Common Questions When Starting A Parking Lot Business

How much does it cost to start a parking lot cleaning business?

Starting a parking lot cleaning business can range from a minimal initial investment to a more substantial outlay, depending on the scale and scope of services you intend to offer. Generally, the startup costs can range from $500 for a basic setup to over $50,000 for a business that starts with specialized machinery.

Here’s a breakdown of the potential costs involved:

Vehicles: A reliable vehicle will be needed to get to the job site. Depending on the equipment, a truck, van, and/or trailer may be needed. This cost can range from $0 if you already have a vehicle to $80,000 if buying new.

Manual tools: Brooms, dustpans, buckets, and trash bags can have an initial cost of around $100 to $200.
Pressure washer: Basic models can start from $300 and can go up to $3,000 for commercial models.
Vacuum sweeper truck: These specialized vehicles can range from $20,000 for used models to over $80,000 for new, advanced models.

Business licensing and permits: Depending on your locality, obtaining the necessary business licenses and permits can cost anywhere from $50 to $400.

Marketing: A basic website & hosting, logo design, business cards, flyers, and vehicle signage can cost between $200 to $3,000.

How profitable is a parking lot cleaning business?

The profit potential of a parking lot cleaning business can vary widely based on factors such as location, scale, efficiency, and the competition. However, for the sake of this estimation, let’s dive into a hypothetical scenario using industry-related data.

Suppose a parking lot cleaning business operates a vacuum sweeper truck and cleans an average of five medium-sized parking lots a day at a rate of $100 per parking lot. This would translate to a daily revenue of $500 and monthly revenue of about $15,000 (considering a 30-day month).

Revenue: 5 parking lots/day × $100/parking lot × 30 days = $15,000/month

Now, let’s estimate the monthly expenses:
Labor: A driver/operator’s wages might be around $3,000/month.
– Fuel and Maintenance for the Truck: Approximately $1,000/month.
– Equipment Maintenance and Supplies: Around $500/month.
– Rent (if there’s a physical office): About $1,000/month.
– Insurance: An average of $100/month (assuming a $1,200 premium)
– Miscellaneous Expenses: Including marketing, communications, utilities, etc., might come to around $900/month.

Combining these, total monthly expenses would be approximately:
$3,000 (labor) + $1,000 (fuel and truck maintenance) + $500 (equipment and supplies) + $1,000 (rent) + $100 (insurance) + $900 (miscellaneous) = $6,500/month

Expenses: = $6,500/month

Subtracting the expenses from the revenue:
$15,000 (revenue) – $6,500 (expenses) = $8,500/month in profit or $102,000 annually.

While these figures offer a rough estimate, it’s essential to recognize that actual profit can differ based on various factors, especially seasonality, as you may not be able to work all year round.

What skills are needed to run a parking lot cleaning business?

Professional know-how: You will save yourself a lot of costs and headaches if you can undertake minor machinery maintenance and keep your tools and all equipment in top shape and within regulations.

You will also need a good understanding of dealing with chemical or oil spills. Organizations such as NAPSA or the National Parking Association offer their members a range of educational resources and certifications. 

Supporting your bid for a contract with relevant certifications will always be a bonus. It will indicate to potential customers that they will be in good hands and can count on your professional expertise and know-how.

Excellent organizational skills: Regardless of your customer base, be prepared to work early mornings and nights when most car lots are empty and, therefore, easier to clean. That said, if you have a contract for an apartment complex or warehouse sites, standard business hours or weekends might be the best times to work. Of course, you are your own boss, so you can decide how much and when you want to work and what contracts you’d like to take on. But there will sometimes be an urgent need for this kind of work, and you may be called in to clean parking lots after hours. 

Good time management is part of good customer service, which, in turn, will help expand your brand through word of mouth. 

How To Start A Parking Lot Cleaning Business

How To Start A Parking Lot Cleaning Business

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