How to start a cleaning business

Why start a cleaning service?

Starting a new business can be daunting. But if it’s something you dream of doing, there’s a low-cost, practical option staring you in the face.

A cleaning business may not be a glamorous gig, but it has real advantages:

• Low start-up and running costs – you can base the business out of your home, and your largest expenses, at first, will be your equipment and a vehicle. If you don’t have these already, you can buy them second hand.
• Flexible hours – you can start part time while working at another job.
• Plenty of work! Cleaners are always needed, even during economic downturns, and there’s plenty of potential for helping your business grow.

Of course, there are challenges too. Cleaning is physically demanding, it’s a competitive market to break into, and it’s hard to stand out from the crowd. Pricing can be very competitive so you need to set your prices at the right level. Finally, running a business is stressful and full of paperwork.

But if you have time-management skills, an eye for detail, and are friendly and reliable, you could be just the new broom the industry needs.

Types of cleaning businesses

Cleaning businesses fall into three main groups: residential, commercial, and specialist cleaning.

Residential cleaners deal with private homes and apartments. You won’t need a large team or specialist equipment.

A commercial cleaning company provides services to offices, retail spaces, and other commercial or government properties. These companies often require industrial or specialist equipment and a team of certified cleaners, and must compete for commercial contracts.

Specialist cleaning services include:

• Oven, window and carpet cleaning
• Move-in and move-out cleaning
• ‘Green’ cleaning
• Post-construction, crime scene, disaster, and hazardous cleaning

While specialist services may require specialist equipment or certification, they help you stand out from the crowd and tend to command higher prices.

How do I start a cleaning business?

Here’s what you need to launch your new venture:

• A business plan that outlines your services, your target market, and your financial projections. Here’s some info on creating a business plan and business financing.
• A legal structure: are you flying solo, creating a partnership, or thinking big and going for a limited liability company?
• Licences and permits: how do you get a cleaning service license and permit for your region?
• Insurance: to protect your assets and your business
• Supplies and equipment
• Marketing materials: a website and social media presence, business cards, and promotional materials

Here’s more information on getting a business off the ground.

Five steps to start your cleaning business

1: Do your market research and create a business plan

Research the cleaning services in your area. What’s available? What’s needed? How are your competitors pricing their work, and what are their strengths and weaknesses? Are there any market niches not filled? Talk to your friends and family, shopkeepers, local Airbnbs, business associations, and anyone who has used your competitors.

Identify your target market: are you cleaning houses and flats or commercial premises?

Next, you’ll need a business plan – whether you’re going for a start-up loan, a business grant from the government, investment from private investors, or just a roadmap to show you the right direction.

Your plan defines your business goals, the services you offer, and your pricing strategy.

• Work out how much you need to survive until the business starts to break even. Costs quickly add up when you include marketing, website development, insurance, and legal and accounting advice. (Pro tip: you can build your own website with a website builder platform.)
• Know your running costs and decide your profit margin.
• Establish a price list. Are you charging by the room, the square metre, or per job? Or will you tender for contracts?
• Make your prices competitive, but don’t be the lowest-priced cleaner on the block. Think of value-added services and packages you can offer.
• Test your prices with your target market and adjust them if necessary, based on customer feedback and market demand.
• Consider creating a quote/proposal template for bigger jobs.

Here’s a business plan template to get you started.

2: Check legal requirements

One of the first steps in setting up your own company is deciding the business structure that’s right for you.

Sole trader

This is a business operated by a single person. It’s the simplest structure of all – the owner takes all the profits and losses and reports them on their personal tax return. But you’ll need insurance – sole traders have no legal protection and if anything goes wrong, you may lose your personal assets, such as your house and savings.

Partnership

This is a business owned by at least two people. Partnership agreements should define profit share and start-up contributions (money, assets, time). Again, there’s no legal protection if anything goes wrong.

Company

Operating as a company is more complicated but it comes with advantages.

• You’ll generally pay tax at a lower rate
• Assets and debts of the business are kept separate from your personal assets and debts
• It’s easier to get funding and investment, to grow your business, and to sell it in the future

Franchise

Buying into a franchise gives you:

• Brand awareness and marketing
• Training and support for staff
• A proven business model
• Established systems and processes

But buying into a franchise is expensive and there’s no guarantee you’ll receive much support, advice, or marketing. You may not have much control over decisions, either. So if you plan to go this way, do your homework!

What other legal requirements are there? You may need a cleaning business permit or license, liability insurance, and to register your company and then register it with your tax authority. Here’s some more info to make it simpler:

3: Buy cleaning supplies and equipment

Now for the tools of the trade. Will you buy or hire your equipment, or use what you already have? Remember, you can buy second hand to keep costs down.

You’ll just need the basic cleaning supplies for businesses:

• Vacuum cleaner
• Mop, bucket, and broom
• Toilet brush
• Disposable gloves, cloths and wipes, scourers and sponges
• Dustpan and brush, dusters, and window squeegees
• Bottles and spray triggers
• Safety signs (for commercial premises)
• Face masks, paper towels and hand sanitiser

Even if you plan to stay close to home, you’ll need a vehicle or van, but again, you can buy second hand. (Then again, you could travel by bike and call yourself ‘The wash cycle’.)

One investment that’s worth the money is eye-catching signage on your vehicle: your business name, logo, and contact details. People can’t miss you, especially when they’re stuck in traffic.

Use quality commercial-grade cleaning products rather than regular supermarket cleaners. The right cleaning products company might give you training and how-to information. Keep a small supply in stock at all times, but don’t waste money buying large stocks you won’t use within a month.

Consider making your products your point of difference. Think about choosing eco-friendly cleaners that are cruelty-free (they haven’t been tested on animals), hypo-allergenic, pet- and goldfish-friendly, and free of harmful chemicals.

Will you wear a uniform? A company shirt and black trousers adds that professional touch. Make sure you keep track of your expenses to make it easier come tax time.

4: Develop a strategy to get clients

OK, you’ve found your niche and your unique selling point (USP). You’ve chosen a business name that’s simple, positive, and catchy, and checked it’s available. You have an eye-catching logo and you’ve printed up your business cards. How do you get clients?

It’s time for a marketing plan.

Get the word out

Build a database of potential clients. Get friends and family to spread the word and advertise in local publications and radio. Put flyers in letterboxes with tempting opening offers, do leaflet drops, and go to community events.

And network, network, network! Build relationships with companies who have an existing client base, like real-estate agents and property managers. Talk to shops, Airbnbs and holiday rental organizations. Make sure everyone in your area knows who you are and what you do.

Build your web and social media presence

Build a website – keep it simple so it looks good on smartphones. Include your values and mission statement to show what’s important to you. Have a Facebook page and at least one other social media platform (maybe Instagram).

Set your prices

Price fairly, but offer value for money too. Throw in special offers with your cleaning packages and offer clients a discount for referrals.

Get the basics right

• Be friendly and professional when you pick up the phone. Be there when you say you will.
• Make sure your employees are well vetted and police checked – remember, they’re going into people’s homes.
• Go above and beyond. Exceptional service is rare and if you provide it, your clients will not only stay with you but advertise you to their friends, families, and colleagues. Little things make a big impression – leave a handwritten note with dried lavender, offer discounts to repeat customers, or leave a card on a client’s birthday with a couple of home-baked cookies.
• Respond quickly to customer feedback and use it to improve your business.

And remember: word of mouth is the best advertising, so collect testimonials from satisfied customers. Reviews, referrals, and ratings are great ways to build a customer base.

5: Manage daily operations and plan for growth

When you’re doing all the cleaning yourself, your income’s limited to the hours you can work,and you don’t get paid (and may lose your clients) if you’re sick or on holiday. So plan on growing your business and becoming the owner, not the hired help.

Create a detailed written process for everything you do – you’ll reduce training time and costs, and help quality control. You can then hand over the processes to someone else who can easily follow them.

When you need extra help, you can hire subcontractors or employ staff. Subcontractors are fully trained, have the right equipment, and are available right away. But they’re expensive, and quality control can be difficult.

So, as your business grows, think about building your team. You need reliable, hard-working people who are vetted and have great references.

• You’ll need to advertise job openings, interview candidates and, once they’re hired, train them in your systems.
• You’ll also have to meet legal obligations (such as tax, superannuation, sick leave, holiday pay) – accounting and payroll software like Xero is your best friend here.

If you want to scale up your business, explore new markets and look at adding specialist services. You’ll need to invest in training and better equipment, but specialized services command premium prices and mean fewer competitors.

Build your cleaning business with Xero

So snap on those disposable gloves! It’s good money and a steady gig, and Xero will be with you every step of the way. Fill in the form below to get our comprehensive guide to starting a business.