Cleaning services are consistently in high demand. Not everyone has the time or ability to maintain cleanliness in their homes and workplaces. This creates a valuable opportunity for starting a cleaning business that caters to those who prefer the convenience and expertise of professionals handling their cleaning tasks.
If you’re interested in starting a cleaning business, read on for a step-by-step guide.
Step 1: Research the market
Starting a cleaning business has relatively low startup costs, making it a highly competitive business choice. However, to be successful and reduce risks, it’s essential to understand your consumers.
Research why consumers need the help of a cleaning company, the problems they need to solve, their values (such as a preference for green cleaning products), and how much they can spend.
Study your competition. What can you offer that differentiates your company and services? Read online reviews to understand what consumers value in a service, their complaints, and where gaps exist.
You’ll also need to decide what cleaning service you will provide. Do you want to be part of a franchise or independent? Will you offer basic or specialized cleaning services, like rug cleaning, green cleaning, or pressure washing?
Step 2: Have a business plan
A business plan defines your cleaning business, what products and services you offer, and how your company will operate and expand. It can also help you make important decisions, set goals for growth, and spot any potential risks. Plus, a solid business plan can help make it easier to get financing or bring in new business partners.
Here’s a suggested outline for your cleaning business business plan:
- Executive summary: A brief overview of your business and why it will be successful.
- Company description: Include detailed information about your business and explain your competitive advantages.
- Service and product offerings: List the cleaning services you will offer.
- Organization and management: Outline how your cleaning company will be structured and who will run it. For example, will it be a partnership, LLC, or S-Corporation? Who will be responsible for day-to-day management?
- Market analysis: What is the industry outlook? Who are your target customers? What competition are you up against?
- Financing plan: Include a description of your funding requirements, your detailed financial statements, and a financial statement analysis.
- Marketing strategy: What is your overall plan for reaching out and converting contacts into customers? How will you communicate your advantages over competitors?
Step 3: Choose a business structure for your cleaning business
Your choice of business structure will impact daily operations, taxes, and the liability risk you’re willing to take with your personal assets. Choose a structure that balances legal protection and benefits.
The four most common are:
- Sole proprietorship: This means that the business is owned and run by one person with no legal distinction between the owner and the business.
- General partnership: A general partnership is the most straightforward variety of partnerships and is created automatically when two or more people engage in a business enterprise for profit. No state filing is required.
- Limited liability company (LLC): This is one of the most popular forms of business entity among cleaning businesses. An LLC offers limited liability protection (shielding your assets by protecting them from debts and liabilities associated with the company) and pass-through taxation.
- Corporation: A corporation is a separate legal entity owned by its shareholders, protecting owners from personal liability for corporate debts and obligations.
For more information on business entity structures, read Comparing company types.
Step 4: Understand the legal requirements of your cleaning business
Your cleaning business may be subject to various legal requirements depending on your business structure and location.
- Business licenses and permits: Most businesses must obtain licenses and registrations regardless of the business entity type. For a cleaning business, this may involve obtaining a general business license at the local or state level. In some jurisdictions, even if you operate your business from home, you may still need to obtain a home occupation permit.
- Sales tax: While most cleaning businesses aren’t subject to sales tax, rules vary by state and can change over time. You may also need to register your business with the Department of Revenue in your state and any other state where you have a nexus.
- DBA filing: If you do business under an assumed name or trade name, you must make a DBA filing with your state or local jurisdiction.
- Hiring employees: There are various requirements when hiring employees, such as obtaining an EIN and registering with the Department of Labor in your state. You will also need an EIN if you form an LLC or corporation.
- BOI filing: You may need to fulfill other requirements, such as getting a registered agent and filing a Beneficial Ownership Information Report with FinCEN.
For more information, see What are the legal requirements for starting a small business?
Step 5: Open a business bank account and credit card
Corporations and LLCs must by law separate their business and personal finances. The best way to do this is by opening a bank account and obtaining a business credit card. These should be used exclusively for business expenses to maintain liability protection in case of legal action against the business. A business credit card can also help you build credit and negotiate good terms with vendors and suppliers.
Consider opening a business bank account as soon as your cleaning business starts incurring expenses or generating money.
Step 6: Meet insurance and bonding requirements
Although forming an LLC or corporation can, in most cases, protect your personal assets it won’t protect you from risks you may incur in your cleaning business, such as damage to a client’s property or injury.
Insurance can protect your company and its assets in case of the unexpected. Furthermore, if you have employees, you must obtain unemployment insurance from your state’s Department of Labor.
Check whether your state requires your business to be bonded. Most commercial clients require this, and it can enhance credibility with prospective customers.
Step 7: Create policy statements and contracts
Develop a clear set of policies about the services your cleaning business will and won’t provide. Post them on your website and give a copy to clients before reaching an agreement about your services.
Develop a contract template that sets clear expectations and includes language that protects your business and clients. Include details about the scope of work, pricing, cancellation policies, days and times of service, location of service, and who provides the cleaning equipment – you or your clients.
Consider having a legal professional review a draft or have them draw up a standard template that you can modify for each client.
Frequently asked questions about starting a cleaning business
Do you need a license to start a cleaning business?
Most states don’t require specialty licenses to start and operate a cleaning business. However, your cleaning business may be subject to general business licensing requirements. These may include:
- Basic business operation license: This is a license from the city in which your business will operate or from the local county (if the business will be operated outside of the city's legal boundaries).
- Home occupation permit: This permit for home-based businesses prevents businesses from causing a lot of extra traffic, noise, or other things like dust or smells that would bother the people who live nearby.
- Zoning permit: Some states require proof of proper zoning for cleaning businesses.
- Building permit: If you plan on remodeling or building a commercial space, you'll need a building permit.
- Sign permit: Many local governments require a permit for sign displays and installations
- Sales tax license/sellers permit/resellers permit: You need a license or permit to sell almost anything, and the name of this document varies by state.
- Certificate of occupancy: This document outlines the purpose of the structure and its suitable applications and ensures compliance with building codes.
Who needs cleaning services?
Here are some of the types of businesses or individuals that hire cleaning companies.
- Residential
- Short-term rentals
- Schools and day care centers
- Medical and dental offices
- Restaurants and bars
- Office buildings
- Retail stores
- Banks
- Salons
- Hospitality
