If you have a passion for cleaning and you’re good at it, you may have considered starting your own cleaning business before. As with starting any business, there are many important considerations to take into account. One of the main considerations is the average cost to start a cleaning business.
When you’re kicking off a cleaning business, financial planning is key. You’ve got to keep tabs on everything, from equipment and supplies to licenses and marketing, as it all adds up. By getting the lowdown on the cost breakdown, you’ll be well-prepared to make savvy choices and embark on your cleaning business journey with confidence. We’ve got your back as we answer the question, “How much does it cost to start a cleaning business?” while providing tips on how to reduce costs so you can create a budget that sets you on the path to success.
Select the Type of Cleaning Business
One of the early and pivotal decisions to make when starting a cleaning business revolves around selecting the specific niche or type of cleaning services you intend to offer. During this phase, it’s important to decide whether you’ll be focusing on commercial or residential cleaning.
Commercial Cleaning
In commercial cleaning, your primary client base will consist of businesses, offices, and other commercial properties. This encompasses services such as office cleaning, janitorial services, or industrial cleaning.
Commercial cleaning often necessitates specialized equipment and may have different prerequisites compared to residential cleaning.
Residential Cleaning
On the flip side, residential cleaning involves catering to individual homeowners and households. This entails services like home cleaning, maid services, and organizing. The equipment and supplies required for residential cleaning are generally more accessible and cost-effective.
The choice between commercial and residential cleaning holds substantial sway over the average cost to start a cleaning business, the audience you target, and the range of services you provide. It’s advisable to evaluate the advantages and drawbacks of each option and make the decision that best aligns with your skills and the prevailing market demand. This well-considered choice will serve as a solid cornerstone for the success of your cleaning business.
How Much Does it Cost to Start a Cleaning Business?
In this section, we will review the factors to consider on the average cost of starting a cleaning business. Let’s dive in!
Selecting a Business Name
Estimated cost: Free
The first thing you’ll need to do when starting a cleaning business is to select a name so you can register it as an official business. Luckily, this one’s free, so it won’t add to the average cost to start a cleaning business!
You’ll want to select a name that is unique and memorable yet represents the services you provide as a company. For example, if you’re a carpet cleaning business, consider adding ‘Carpet Cleaning’ in your business name. If you need help thinking of names for your business, take a look at this Free Cleaning Business Name Generator.
Registering Your Cleaning Business
Estimated cost: $100–$800
State Registration
Once you have selected a business name you love, you’ll need to register it with your state. You can register your business as a DBA (Doing Business As) or as an LLC (Limited Liability Company). Take a look at this article to learn the differences of a DBA vs an LLC.
Registering your business can cost as low as $100 for a DBA, but it will depend on your location. This link has a list of all the costs by state. Keep in mind that an LLC can cost several hundred dollars.
Vendor License
The next license you will have to purchase is a vendor license. A vendor license is essential for several reasons, and tax purposes is one of them. This license also allows you to legally own and operate your own business. Once you have selected a DBA or an LLC, you will need to get your vendor’s license issued.
Optional Trademark
Trademarking your business name can help prevent other companies from using the same or similar business name as yours. So, if you plan on expanding your business nationally or even internationally, you should highly consider a trademark.
This can be done through the U.S. Patent and Trademark office and has a fee of $375.
EIN and Bank Account
One of the last steps in registering your cleaning business is to obtain an EIN (Employer Identification Number) from the IRS. Your EIN is required for state and federal taxes and doesn’t cost you anything to obtain. Lastly, you should open a separate bank account so you can have your business expenses separate from your personal expenses.
Creating a Website
Estimated cost: $250–$10,000
Having a professional business website is essential if you plan on running a successful cleaning business, so consider this in the average cost to start a cleaning business. Your website allows you to have a scheduling tool for your clients, post your services and pricing, have contact information, and more.
Before creating a website, you will have to purchase a domain name. If available, you’ll want to use your company name as your domain name. You can register a domain name on either GoDaddy or Google Domains. You can pay for this monthly or annually, but it can cost you anywhere from $9–$15 a month.
Once you have purchased a domain name, you’re ready to create a website! You can either do this yourself with templates on Wix, WordPress, GoDaddy, and Squarespace, or you can pay someone to create your website. Keep in mind that paying someone to create your website can cost anywhere from $1,000–$10,000. If you’re doing it on your own to reduce costs, you can look at paying anywhere from $10–$20 per month.
Purchasing Cleaning Business Insurance and Bonds
Estimated cost: $455
Having cleaning business insurance and bonds is essential when starting your own cleaning business. Insurance provides a financial safety net and an effective way to reduce costs in case an accident occurs. If one of your employees damages a customer’s property, like breaking a window or staining a carpet, your company can be held liable to pay to repair the damage. This is why you need cleaning business insurance.
Insurance Canopy provides affordable, top-notch cleaning business insurance and bonds. You can purchase a monthly insurance policy for $26.67 per month or $320 per year. To purchase a janitorial bond, you will first need to purchase insurance. Bonds are available starting at $134 per year. Find out how to find the best cleaning business insurance in this blog.
Gathering Cleaning Supplies
Estimated cost: $2,000–$20,000
Without proper cleaning supplies and equipment, you wouldn’t be able to provide cleaning services. Gathering your supplies and building up your inventory is necessary when considering how much it costs to start a cleaning business. You’ll want to start by looking at wholesale websites so you can purchase supplies in bulk at a discounted price and reduce costs.
The amount you spend on cleaning supplies and equipment will depend largely on what services you provide and how many employees you plan on hiring. A window cleaner will need squeegees and buckets, and a house cleaner will need more cleaning products, like toilet cleaner and mops. When just getting started and collecting supplies, you should plan on spending $2,000–$10,000. Check this out to get a better idea of what cleaning supplies you need to start a cleaning business.
You will also need a vehicle to transport your supplies from location to location. To stay professional, we recommend having a designated company vehicle with the company name on it. This can cost anywhere from $5,000–$20,000.
Marketing Your Business
Estimated cost: $500–$1,000
Marketing and advertising are efforts you will constantly be focusing on, so don’t forget to add this to the average cost to start a cleaning business. Marketing your business helps you find new customers, which helps you generate more money. Many people starting their own businesses can spread the word about their business by word of mouth. You can also create social media accounts for your business—be sure to create pages on at least Facebook and Instagram. Create consistent content and post regularly to generate a following and create awareness of your company.
Most small businesses spend 1% of their revenue on marketing, so if you want to make $50,000, you should plan on spending $500 on marketing. You can also hire a professional to do your marketing, which may return the best results, or you can take a stab at it yourself and reduce costs. Take a look at this blog to get ideas on how to market your cleaning business.
Other Factors to Consider in the Average Cost to Start a Cleaning Business
Certainly, while preparing your financial plan, it’s essential to consider various budgetary aspects in the average cost to start a cleaning business to ensure smooth operations and be well-prepared for any unexpected circumstances.
- Contingency Fund: First, it’s wise to establish a contingency fund. This fund serves as a financial safety net to tackle unforeseen financial obstacles or seize unexpected opportunities that may arise along the way.
- Employee Wages (If Applicable): If your plans involve hiring employees, you must budget for their wages and benefits. Employee costs will vary depending on the number of staff you bring on board, their respective roles, and the prevailing labor market rates. Be sure to include payroll taxes in your calculations. Check out this blog for tips on choosing the right employees for your cleaning business.
- Office Space and Utilities: If your business plan includes having a physical office for administrative tasks or client meetings, it’s important to allocate a portion of your budget for rent, utilities, and office supplies.
- Software and Business Tools: Investing in business management software or tools for functions like scheduling, invoicing, and customer management can significantly streamline your operations. The exact costs will depend on the specific tools or software programs for your cleaning business that you choose to employ.
- Miscellaneous Expenses: Lastly, don’t overlook the significance of allocating funds for unforeseen or miscellaneous expenses that may crop up during the startup phase in the average cost to start a cleaning business. Maintaining a financial cushion can prove invaluable in helping you navigate through unexpected challenges with confidence and ease.
7 Ways to Reduce Costs for Your Cleaning Business Startup
Getting your cleaning business off the ground can put a strain on your finances, but there are ways to reduce costs without sacrificing the quality of your services. In the following section, we’ll delve into practical strategies to help you lower your expenses and create a more budget-friendly foundation for your cleaning business.
1: Buy Products at Wholesale Prices
As mentioned earlier, if you’re cleaning commercial offices, residential properties, windows, etc., one of the best things you can do to reduce costs for your cleaning business is to buy your cleaning products at wholesale prices. Purchasing products at wholesale prices lets you buy greater quantities at lower prices and build up your inventory of products for less money. Buying your cleaning products at a local grocery store can be noticeably pricier compared to sourcing them at wholesale rates.
Additionally, wholesale suppliers typically provide a selection of products tailored for professional cleaning applications. This not only translates into cost savings but also ensures that you have access to the right tools and materials required for delivering top-notch cleaning services to your clients.
When purchasing cleaning products at wholesale, you typically need your business tax ID to set up your account online. Other places require paperwork to get approval before purchasing products. Do some research to find the best provider for you and the requirements they need to get started.
2. Consider a Home-Based Office
Setting up a home-based cleaning business can significantly cut costs. It eliminates the need for renting office space and related expenses like utility bills. If you have a dedicated space at home for administrative tasks, it can save you a substantial amount of money. Just ensure you check local regulations and zoning laws to ensure you can legally operate a home-based business.
3. Take a Jab at DIY Marketing
While marketing is essential, you can save money by handling some aspects yourself. Create your website using user-friendly website builders like Wix or WordPress. Utilize free or low-cost marketing tools for cleaning businesses to create business cards and marketing materials. Engage with potential clients through social media platforms without the need for expensive ad campaigns.
DIY marketing not only saves money but also allows you to have more control over your brand’s image.
4. Outsourcing and Contract Labor
Hiring full-time employees can be expensive, especially in the early stages of your business. Instead, consider outsourcing tasks like accounting, website maintenance, and graphic design to freelancers or contract workers to reduce the average cost of starting a cleaning business.
This way, you only pay for services as you need them, reducing the burden of ongoing salaries and benefits. As your business grows, you can evaluate whether it makes sense to hire employees full-time.
5: Track Your Company’s ROI
The second cost-saving recommendation we have for you is to keep track of the return you’re getting on your investment. If you pay someone a monthly fee to take care of your marketing on social media platforms, sit down and do the math to see if their work is bringing in more money than you pay them. If you spend a certain amount of money on Facebook ads per month, find out how much money those ads are really bringing to your business.
You can calculate the ROI by using this simple equation. If the ROI is not adding value to your business, you may need to make some big changes.
6: Reevaluate Monthly Expenses
Our third tip to reduce costs is to reevaluate your monthly expenses that you’re having to pay regularly. Now that you already have an answer to the question, “How much does it cost to start a cleaning business?” The next question you should be looking to answer is, “Am I using my finances correctly?”—if you have an office where you rent space, is the monthly cost still fitting your budget? How much are you paying for your cell phone and internet plans? If you haven’t already, bundle your phone and internet together under the same provider. A CPA can tell you caps and limits to write-offs and categories you can use. So, phone and internet connection for the business can be written off, and your CPA can tell you how much.
You can also take a look at how much money you and your employees are spending on gas to fill up company vehicles. These are just a few cost-saving ideas to get you thinking about small monthly expenses that can have a huge impact on your business.
7: Review Insurance Coverage Yearly
In the competitive world of cleaning businesses, managing your financial resources efficiently is essential. Beyond the initial expenses, ongoing costs like insurance play a significant role—insurance expires and your company grows. This is why conducting an annual review of your insurance coverage can help you optimize costs and ensure you’re not overpaying. If you feel that you are overspending on your cleaning insurance, do some research and find what will best fit your business.
An annual insurance review also allows you to adapt your coverage to your current situation. It helps identify potential discounts and ensures compliance with evolving regulations. This proactive approach ensures you get the most value from your insurance, safeguard your business, and keep costs under control.
Insurance Canopy offers top-rated, affordable cleaning business insurance for $26.67 per month, which is a small price to pay to protect your business. Insurance Canopy also has cleaning business insurance policies for carpet cleaners, house cleaners, janitors, maids, and window cleaners, while offering several benefits with our policies—like a proof of insurance document that you can download and a site seal to show your clients that you’re a credible and insured professional. You also have the option to purchase a policy monthly or annually, which you can cancel at any time. If you have any questions, feel free to contact our licensed insurance agents.
Jumpstart Your Cleaning Business with Cost-Effective Solutions!
Starting your own cleaning business can be a rewarding venture due to the industry’s consistent demand. While the initial steps may be manageable, maintaining your efforts and staying motivated during periods of slower progress can be challenging. The key is persistence – keep working at it, don’t get discouraged by immediate results, and you’ll eventually achieve the success you’re aiming for.
To protect your cleaning business and secure its financial future, fill out your cleaning business insurance application today to get a quote!
*Note: this blog does not cover every single action you need to take when starting a cleaning business. Be sure to do continued research and consult a professional for any business advice.
