A recent poll revealed that over half of the US population feels overwhelmed by the clutter in their home, and a quarter of all Americans have admitted to having a problem with a messy house. And that statement is not just about the look and feel of an untidy space. Living in a disorganized environment can negatively impact your mental and physical health, as well as your relationships and social interactions.
Assisting someone to reorganize their place will help make it look neat and more spacious and benefit a person’s lifestyle and well-being as well. So, if you are passionate about creating order out of chaos and have a knack for organizing spaces, a home organization business might be perfect for you. However, having the knack for organizing spaces alone is not enough to succeed in this industry. You need an understanding of the business and a strategic approach to get started. In this guide, we will provide you with an overview of the home organization business, the steps to get started, and answers to common questions..
A home organization business involves helping clients declutter and restore order to their homes, offices, or other spaces. As a home organizer, you’ll work closely with clients to declutter their spaces, create efficient systems, and bring harmony back into their lives. This business offers a unique opportunity to make a positive impact while doing what you love.
Your services may include the following:
- Hands-on and in-home help and virtual declutter services
- Communicating with the client to understand their lifestyle and their short-term needs
- Developing long-term organization plans for your client
- Offer complete, clean-out services for hoarders
- Organizing and cleaning individual rooms, closets, garages, spaces, or buildings
- Optimizing available spaces and finding appropriate storage solutions
- Organizing and labeling items
- Dispose of unwanted or excess items (disposal, recycling, donations)
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Even before Marie Kondo arrived on the scene, home organization businesses were popular. Now, with people leading increasingly busy lives and accumulating more possessions, the need for professional organizing services continues to rise. Also, as more people recognize the physical and mental benefits of an organized space, the demand for home organization professionals is expected to grow.
Between now and 2025, the professional organizing industry is expected to expand at 4% annually. In addition to individually-owned businesses, there are franchise options such as Bee Organized or Neat Method.
Steps To Start A Home Organizing Business
Organizing your life can be difficult, but starting a successful professional organizing business doesn’t have to be. With the right tools and knowledge, you can make sure your business is successful from the beginning. A great way to begin this journey and stay on track is to run through our steps to make sure you have completed the relevant items to get your business started.
Step 1: Research the Market
Before starting a home organization business, conducting market research helps you determine if there is a need for your services. By gathering insights about industry trends, target customers, competitors, and customer preferences, you can make informed decisions that align with market demand, such as focusing on the specific home organization services you’ll offer.
First off, researching industry growth projections and trends allows you to understand the potential demand for home organization services. By staying updated on the latest trends in the professional organizing industry, you can identify emerging needs and adapt your service offerings accordingly. This information helps you decide which specific areas of home organization to focus on, such as decluttering, space optimization, or digital organization. The National Association of Productivity & Organizing Professionals (NAPO) and the American Society of Professional Organisers (ASPO) are great places to learn more.
Next, identify the demographics and characteristics of those who are most likely to seek home organization services in your area. This understanding enables you to tailor your services to meet their specific needs. For example, if your research identifies that families with young children are a significant target market, you can consider offering services related to organizing toys or setting up child-friendly systems. To learn more about how many of your target demographic is local, look at data from the Census Bureau.
Taking customer research a step further, you can have conversations with individuals who may require home organizing services, such as realtors or interior designers, to gain valuable insights into what they look for in a service provider. This information informs the specific home organization services you choose to offer, ensuring they align with customer expectations and address their unique challenges.
Last, analyzing your competitors’ service offerings provides insights into the gaps and opportunities within the market. By researching other professional organizers in your area, you can assess the services they provide, their rates, and their marketing messages. This analysis helps you differentiate your business by offering unique services not currently available or improving upon existing services to meet customer needs more effectively.
Step 2: Write a Business Plan
Writing a business plan for a home organizing business (or any business for that matter) is important for long-term success. While the thought of starting a business can be exciting, many people will want to skip this step, but they shouldn’t.
A business plan helps you think critically about various aspects of the home organization business. Key components of the plan include identifying your target market, analyzing your competition, and outlining your marketing strategies. By conducting thorough market research and documenting your findings, you can better understand your industry and position your business for success.
Another benefit of a business plan is the section where you project income and expenses. By estimating the potential revenue and determining the costs involved in running a home organization business, you can gauge whether your business idea is financially viable. It’s better to know in the planning stage whether your idea is feasible rather than after you’ve already invested significant time and resources.
Related: How to write a business plan
Step 3: Secure Funding if Needed
The next step in starting a home organization business is making sure you have the funds available. While the cost of starting such a business is generally low, it is important to consider funding options if you need additional capital to get started, as funding can be a roadblock for many.
First, since the startup cost is low, many people are able to start their home organizing business with their own funds. If your personal funds are insufficient to cover all expenses, another option is to apply for a bank loan. Banks offer a range of loan options, from personal to small business loans, and they can provide flexible repayment terms. Before applying for a loan, make sure to research different banks and compare their terms, interest rates, and fees. Also, ensure that you have a solid business plan in place to present to the bank to increase your chances of approval.
Another funding option is to consider loans from friends and family. Loved ones may be more willing to lend money to you without taking on the level of risk that a bank might. Offering a repayment plan and presenting a solid business plan could help encourage family and friends to lend you the money you need.
Finally, microloans are another funding option to consider. Microloans are small loans issued by economic development organizations to help entrepreneurs who are unable to access traditional funding.
Step 4: Register the Business
When starting your own home organization business, there are tasks to properly register a business and ensure its legality. Specific requirements may vary depending on the state you’re in, but here are some suggestions to help you get started:
Determine your business structure: Choose the right legal structure for your home organization business. The four common types of structures are:
- Sole proprietorship: This structure is the simplest and most common for small businesses. As a sole proprietor, you have full control over your business and its profits, but you also have unlimited personal liability for any debts or legal issues.
- General partnership: If you plan to start the business with one or more partners, a general partnership is an option. It offers shared responsibilities, profits, and liabilities among the partners.
- Corporation: A corporation is a separate legal entity from its owners (shareholders). It provides personal liability protection, and the business can acquire its own assets and enter contracts. However, setting up a corporation involves more paperwork and ongoing compliance requirements.
- Limited Liability Company (LLC): An LLC combines the liability protection advantages of a corporation with the flexibility and ease of operation of a sole proprietorship or partnership. It offers personal liability protection for owners while requiring less formalities than a corporation.
The most common structure for a home organization business varies by individual, but sole proprietorships and LLCs are often popular choices due to their simplicity and flexibility.
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.
Obtain business licenses and permits: While there aren’t specific licenses for a home organizing business, there are general licenses and permits that may be needed.
Every state is different, but in general, you want to look for a sales tax permit, especially if you will be selling organizational products, though some states tax services as well. In addition, many cities and some states require all businesses to obtain a business license, and if you have employees an Employer Identification Number may be needed.
Step 5: Set Up Operations
Setting up the operations for your home organization business is the next step we’ll go over.
One important aspect to consider is pricing and payment. Determine your pricing structure by researching market rates in your area and establish competitive pricing for your services. Consider options such as hourly rates, project-based fees, or a combination of both. To manage your finances effectively, choose invoicing software or templates that enable you to bill clients for services rendered and track accounts receivable. Sending professional invoices promptly will help maintain a positive relationship with your clients.
Another element is investing in organizing tools and supplies. These resources will assist you in delivering efficient and effective organizational solutions to your clients. Additionally, consider any proprietary organizing systems or techniques that you may have developed to enhance your services and set yourself apart from competitors.
Last, work on developing efficient and effective processes for your operations. This includes client onboarding, scheduling appointments, tracking progress, and managing paperwork. Creating standardized procedures ensures consistency and streamlines your workflow. Prioritize your tasks, create a schedule, and set realistic expectations to manage your time effectively.
Step 6: Get your Marketing Plan in Place
Getting the word out about a new business can be a struggle as there is a lot of noise and clutter to get through to reach potential clients.
Over the long term, word-of-mouth marketing will likely be the most powerful market channel, though it can take years to build the clientele that will refer clients to you. One way to attract clients is to network with other local professionals such as organizers, interior designers, and realtors. Another way to help facilitate this channel is to provide a referral bonus to your existing clients if they refer a friend.
Additionally, study what competitors, both locally and from those far away, are doing to market their own businesses and “borrow” the things you think will work in your business. A few of these will likely include creating a website with detailed information on what you offer, before and after photos, and feedback from a few happy customers. Being active on social media platforms like Facebook, Instagram, Pinterest, Yelp, and others to highlight reviews of your professional organizing service is effective. Also, handing out business cards and brochures at the Chamber of Commerce and other networking events are ways to get your name in the community.
Step 7: Get Business Insurance
When starting your home organizing business, it’s important to consider the types of insurance you will need in order to protect yourself, your business, and your clients.
While the various types of insurance coverage will depend on the specific risks and exposures of your business, some types of insurance commonly recommended for a home organizing business include general liability and professional liability insurance.
General liability protects against claims arising from bodily injury or property damage caused by your operations or negligence, while professional liability offers protection against a mistake or poor work. Also, if you are using a personal vehicle for business purposes, you will want to review your personal auto insurance policy to see if it covers an accident while being used in the business.
Step 8: Launch your Services!
As you approach the launch of your home organization business, there are a few more boxes to check to ensure you’re fully prepared for the grand opening. While every entrepreneur’s journey is unique, here are a few common loose ends to tie up.
Setting up bookkeeping: Having a system for handling daily transactions, taxes, and financial statements is essential. Accounting software like Wave Accounting (FREE) or Quickbooks can make this task easier and help you keep track of your income and expenses.
Credentials and membership: Consider joining professional organizations or getting certified. For example, membership in the National Association of Productivity & Organizing Professionals (NAPO) and the American Society of Professional Organisers (ASPO) for networking opportunities, education, and credibility.
Contracts and policies: Develop clear contracts and policies for your services to help manage client expectations and protect your business. Ensure that your contracts cover the scope of work, payment terms, and other important details.
Opening a business bank account: Keeping your personal and business finances separate is important for tracking your income and expenses. It also makes tax time much easier too.
Preparing for the grand opening: Plan how you’ll announce the launch of your business. This could include a special promotion, an event, or simply a post on social media.
Common Questions When Starting a Home Organization Business
How much does it cost to start a home organizing business?
This industry enjoys a relatively low barrier to entry. It is labor-intensive but does not necessarily need an extensive start-up budget. While the specific expenses can vary depending on your location and unique circumstances, here is an overview of the common costs.
Total Startup Costs: Approximately $2,000 – $6,000
Business registration: Includes obtaining necessary licenses and permits, which may range from $50 to $500 or more, depending on your jurisdiction.
Insurance: General liability insurance will likely cost $300 to $1,000 annually for adequate coverage levels as an organizer. Product liability may also be recommended.
Organizing tools & supplies: Quality organizational products, storage bins, labels, and packing materials may require an upfront investment of $500 or more.
Office equipment: A computer, printer, phone, website, and other basic home office setup expenses can total $500 to $2,000.
Marketing: Business cards, brochures, website, photography for portfolio, and basic advertising may range from $300 to $2,000 to begin promoting your new business effectively.
How profitable is a home organizing business?
Determining the potential profitability of a home organization business involves considering various factors, including industry averages, costs, and pricing strategies. With an average hourly rate for professional organizers ranging from $50 to $80, let’s explore a simplified profit calculation.
Assuming a single organizer works full-time hours (40 per week) and charges the median rate of $65 per hour, the weekly revenue potential would be 40 hours x $65/hour = $2,600/week.
Considering a 4-week month, the monthly revenue would be $2,600/week x 4 weeks = $10,400/month.
From this revenue, you would need to deduct monthly expenses, including insurance, marketing for the initial month, supplies, transportation, and any other operational costs. Let’s estimate these costs might total $2,000 for the first month. Therefore, the initial profit could be $10,400/month – $2,000/month = $8,400/month.
However, these figures can vary greatly depending on the number of clients, the efficiency of the operations, and the specific costs in your area.
What skills are needed to run a home organizing business?
Communication and interpersonal skills: The line between a cluttered home and one simply displaying treasured mementos is different for everybody. What is a treasure to us does not mean anything to someone else. Improving the functionality and flow of a client’s home and conquering clutter will require excellent listening skills and discreet communication. Remember that this can be stressful conversation for your clients.
Organizational and cleaning skills: As a professional organizer, you will be helping your clients achieve order, function, and clarity and, ideally, make their lives more productive and less stressful. To achieve this, you need to have a knack for maximizing spaces, understand the practical flow of a space and know what is available to achieve the desired outcome. In addition, you must enjoy being neat and tidy.