How to Start a Cleaning Business

Residential and commercial cleaning services are a growing industry in the United States—and it's easy to understand why. Low overhead, scalability, and stable demand make forming your own cleaning business an affordable and reliable venture.

That said, effectively running the business side of things is just as important as providing the service. To build a successful cleaning business, you first have to know your local market, then you can decide what sort of business you want to be and start developing a solid foundation for growth.

Is now the time to start a cleaning company?

Since 2020, small businesses in the U.S. have shown a sharp and consistent rise. From March 2021 to March 2022, Americans opened 1.4 million new businesses. Of those new businesses, 1.2 million were small businesses.

According to the U.S. Bureau of Labor Statistics, 4.4 million individuals worked as building and grounds cleaners in 2023, with a median yearly wage of $38,320 per year. Both employment and wage in the industry saw a small, steady rise since 2020, specifically in the commercial cleaning space.

Additionally, 8.4 million individuals reported employment as domestic cleaners in 2023. Of those workers, 90% earned $45,680 per year—a 0.5% increase from the previous year. Cleaning service trends—such as green cleaning, air duct cleaning,  or other specialty services—have allowed businesses new avenues to offer boutique services with specialized equipment and products, opening up more opportunities to stand out in a crowded industry.

Although startup costs vary based on the initial scale of your business, you can utilize grassroots methods as well as modern marketing tactics to reach potential customers.

Start a cleaning business in 10 steps

To build any business, you'll need to choose a business name that's available in the state where you'll be operating. Once you've completed most of the steps below, you can register your business by filing the proper paperwork with your local Secretary of State. An experienced business attorney can guide you through the process to ensure you meet both state and federal guidelines as well as offer valuable business advice.

Once you’ve got your name, it’s time to make a business plan.

Step 1: Conduct market research

Whether you decide to form a house cleaning business or commercial cleaning business, knowing your target market is critical. While there is always demand for cleaning jobs, your local area will have unique needs that you can tap into with proper research.

Look for spaces to fill market gaps by reading online forums and reviews, such as Google, Yelp, and local Facebook pages, and by researching local competitors. Pay attention to what the people in your area like and dislike about the service your potential competitors provide. Consider if there are any specialty services lacking in your area that potential clients could want.

Determine who your target audience is based on the insights you gain through this research. Your target audience will inform what type of business you want to create.

Step 2: Decide on your service offering

Decide what kind of cleaning service you want to provide based on your skills and the demands of your local area. These are some of the different services you cleaning business can offer:

• Residential cleaning services
• Commercial cleaning services
• Specialized cleaning services

Specialized services encompass niche skills or equipment that differentiate you from competitors. For example, green cleaning services use products that have organic or eco-friendly ingredients vs. conventional cleaning chemicals. You could also offer unique packages such as electronics cleaning, organization, or biohazard cleaning. A niche draws in clients looking for a particular service and allows you to upsell your services based on the higher price of products. 

You may also decide not to specialize initially, especially if you plan on doing every cleaning job yourself at first. It's not uncommon to offer a mixed commercial and residential cleaning service while you build a wider network of satisfied customers.

Starting small and personal allows you to foster trust and build stronger relationships with your clients as you develop a reputation. In the cleaning sector, high customer service and performance reliability is critical to the success of your business.

Step 3: Choose a business model

At this stage you'll make important infrastructural decisions, such as your business model and customer base.

Start by choosing a business model, such as an LLC vs. a corporation. Both models protect you from personal liability, but an LLC will offer more flexibility in terms of your management structure and tax options. Cleaning services often choose LLCs as they make it easy to adjust your business structure to meet continual growth without having to accommodate for the rigidity of a corporation.

You can get more bang for your marketing buck if you target one sector, like commercial cleaning or home cleaning (also known as consumer cleaning). If your business provides residential cleaning services, it's considered "consumer" vs. a commercial company like an office space or warehouse. Both have the potential for repeat customers, although a commercial cleaning contract tends to be more consistent, often contracting on a recurring basis.

Step 4: Write a business plan

A good business plan functions like a roadmap for how you'll develop, run, and expand your business. You can use a business plan to pitch your business to investors or prospective clients. Doing so helps them feel confident about taking a chance on you and helps you visualize how you'll move forward.

Here is the basic outline of a traditional business plan:

• Executive summary. Describe what your company is, your mission, services, and basic information.
• Company description. Provide details on what problems your business will solve in your community and who you plan to serve.
• Market analysis. Break down competitive research. Outline what competitors are doing well and how you plan to improve services further. Identify your target audience and your value proposition.
• Organization and management. Outline how you'll structure your company and who will run it.
• Service or product line. Describe the services you'll offer and how they'll benefit your clients.
• Marketing and sales. Draft your complete marketing and sales strategies. This will change over time, so don't get hung-up on creating something permanent now.
• Funding request. If you decide to seek investors, explain how much you’ll need to run your business for the next five years,how you'll spend the funds you receive, and your plan to grow their investment.
• Financial projections. Detail your financial projections for the next five years. Use your projections to back up your funding requests and draw up plans for possible expansion.
• Appendix. Collect any supportive documents, such as letters of reference, licenses, or any other relevant permits.

This is a general structure that you can adjust based on the needs of your business. For example, you may decide to build your business without outside investors or get up and running before you seek additional funding.

Step 5: Obtain necessary licenses and permits

Insurance protects your business and its employees, and oftentimes it’s required by your state, county, or city. Even if it’s not required, insurance is a good idea—especially if you plan to have employees in the future. You may also need a surety bond if you decide to be a commercial cleaning business.

You can choose which type of business insurance you'll use based on the scale and structure of your business. Generally, cleaning services need at least one of the following insurance types:

• General liability insurance: Covers property damage and personal injury
• Commercial auto insurance: Covers vehicles involved in an accident or other damage
• Commercial property insurance: Covers equipment or property damage
• Workers’ compensation insurance: Covers your business if an employee is injured on the job

Business licenses allow you to operate your business in certain jurisdictions. Certain areas and clients may require you to get a specific business license or permit, especially if you plan to work commercially.

Here is a general list of business licenses you'll want as a cleaning service:

• General business license: Allows you to legally operate your business
• Vendor license: Allows you to collect sales tax on cleaning supplies
• State-specific licenses: Required if your state regulates certain industries
• Client-specific licenses: Sometimes a requirement for certain clients, such as large corporations or government agencies

Ensure you're in compliance with your local laws by contacting your local city’s business licensing authority and your state's Department of Revenue or Taxation.

Step 6: Invest in supplies

Once you have the proper paperwork, invest in supplies and prepare to start operating. Don't go to your local department store and buy all name-brand supplies. Do you research to find the most effective and cost-effective products for the services you'll provide.

Identify commercial suppliers who can bulk supplies to businesses. Check the ingredients and opt for fragrance-free and safe, hypoallergenic products to maintain a safe environment for your clients.

Make sure you keep enough stock that you won't run out last minute. Buying local stock can protect you from having to buy a more expensive or less effective product in a bind and will save shipping costs.

Step 7: Set pricing

You can charge hourly rates, flat rates, or per-square-foot pricing. Hourly and flat rates are more common for home cleaning services, although you may choose to charge by square footage for larger residential houses.Square-foot pricing is a more common structure for commercial cleaning services.

Research how competitors are pricing and factor that into your rates. You may want to start by charging hourly before you switch to a flat pricing to ensure your rate is high enough that you'll make a profit.

Step 8: Focus on the consumer

Once you have secured your first customers, think about how to maintain and expand your client base. Consider discounts for referrals or regular customers. Word of mouth referrals are inexpensive and one of the most effective ways of capturing clients, especially in the cleaning industry.

Good customer service is essential to developing a base of repeat clients, so it's smart to add personal touches with your initial clients. You can do the jobs yourself or with a team of people you already know and trust to ensure you can provide reliable service.

Step 9: Market your business

When it comes to marketing a cleaning service, both modern and traditional tactics are highly effective. Don't be afraid to be vocal about your services to local businesses or friends and acquaintances in your area. Create business cards and flyers that you can pass out in your community.

At the same time, building an online presence will expand your reach for little to no overhead cost. Create a website and Facebook account to advertise your services in local Facebook groups, on Instagram, and on other social media platforms to connect with a wider audience.

Make sure to keep your info up-to-date. Signing up with online business platforms like Google provides further visibility and will help you grow an online reputation.

Step 10: Launch and manage your business

To officially launch your business, register with your local Security of State and file the proper paperwork. This process will vary slightly by state, but you can find state-specific information on your local Secretary of State website. At this stage, an attorney can be an invaluable resource to help you ensure you’re in compliance with relevant laws and regulations.

Once you've registered your business name, get an employer identification number (EIN) by submitting an application with the Internal Revenue Service (IRS). An EIN is essentially a social security number for your business and it's important for tax purposes, especially if you plan on having employees.

Create a budget for ongoing expenses and track sales data to maximize profits and stay ahead of operating costs. Consider every step of the process when building your budget such as transportation costs, equipment and supply costs, labor costs (your own and potential employees), as well the price of business licenses and marketing materials. At first, this will take some guesswork, but over time you’ll get better at predicting income, expenses, and needs.

How much does a cleaning business cost?

Opening a cleaning business typically requires a sizable upfront investment. That said, the scale of your business will determine how large your upfront operating costs will be. If you're starting out solo, you won't have the same equipment, supply, and transportation costs as a business employing a large staff. Startup costs could be as low as $2,000 or as high as $10,000.

Equipment and supplies

Cut costs where you can and invest where it matters. Supplies—such as cleaning product concentrates and reusable washrags—can be bought in bulk to cut costs. Once you've registered your business, connect with wholesale vendors to access discounted prices. Reusable tools have a higher upfront cost but will save you money pretty quickly.

That said, you want to ensure you're investing in high-quality equipment. Vacuum cleaners, dusters, and more specialized tools (such as carpet or window steamers) may be worth a higher price to guarantee quality service. Weigh the value of renting professional cleaning machines vs. purchasing, especially if you're considering offering commercial or specialized cleaning services.

Transportation

Transportation is vital for providing reliable cleaning services no matter how near or far you'll be traveling. Invest in a well-maintained vehicle equipped to transport your supplies, equipment, and personnel to reach your clients promptly and demonstrate credibility. As you expand your business, factor gas, vehicle maintenance, and employee transportation into your budget.

As the business owner, you may also be responsible for providing your employees with transportation as your business grows. This is especially important for larger residential homes or commercial businesses as reliably arriving on time is essential for building a reputation for excellent customer service.

Licensing, permits, and insurance

Legal costs for your business operations will depend on the type of licenses and insurance you need and the state you purchase them in. Check with your Local Department of Revenue for specific prices and required permits. Staying compliant may feel like a big cost upfront, but it's worth the investment to avoid legal trouble and build credibility with clients.

Employees

Employees allow you to expand your business and complete more jobs within a work day. If you plan to hire staff, factor added hiring costs into your budget. Consider investing in liability and workers compensation insurance to stay compliant with federal business regulations and protect your business and employees. You may also want to invest in employing training to maintain your business standard level of service. An employment agreement will help ensure you and your employees are on the same page.

Marketing

While social media and word-of-mouth marketing is low-cost and highly effective, you may want to invest more into marketing your business upfront. Shop around different website hosting platforms—such as Wix or Squarespace—to find a price that fits your budget and needs. Consider the cost of designing and printing memorable business cards and flyers to hand out to local businesses and prospective clients.

How to decide which business structure is right for you

You can choose from a handful of business structures that each have their own benefits depending on what you want to accomplish with your business. You’ll want to consider a few factors when deciding which structure is right for your business: liability, taxes, management and control, costs, and complexity.

Here are the primary business structures you could choose from:

• Sole proprietorship: Best for sole business owners who want to benefit from pass-through taxation and simpler business operations. You will be fully personally liable for any losses or legal action.
• LLC: Limits personal liability and allows you to operate with simpler rules and more flexible tax requirements. LLCs generally come with higher costs for registration and licensing.
• Corporation: Protects you from company liability and debt while allowing you to seek investors, offer shares, and look more official. Requires higher upfront costs and a bigger management structure.
• Partnership: Best for multiple business owners who want to act as partners and share business responsibilities and liability.

LegalZoom’s guided business formation service can help you decide which structure is right for you and advise you throughout the process of forming and managing your business.

FAQs

Are cleaning businesses profitable?

Yes, it's very possible to make a profit from a cleaning business as long as you budget and scale effectively. Start small and build as you go—you can always expand your business once you have a solid customer base and enough demand to hire employees.

What are the risks of starting a cleaning business?

Every business comes with risks. That isn't necessarily a bad thing—what matters is how you prepare for them. Expect the first couple years to be the toughest financially. Budget carefully and adjust your business plan to changes in the market to secure future profits. Get the proper licenses and insurance to protect you and your business should something unexpected happen and avoid business-ending legal expenses.

How do I get clients and retain them?

Market yourself anywhere you can. Once you have your first client, start by doing all the cleaning yourself to keep costs low and add a personal touch, which will help to build trust. Focus on providing high-quality service, even if it's at a higher personal cost. Show up on time, every time. Excellent customer service and reliability are essential to building a loyal customer base that will give word of mouth referrals—the lowest-cost way to capture clients.

Should I hire employees or work as an independent contractor?

You can reduce initial risks and operating costs by working as an independent contractor in the beginning. If your company grows enough to justify hiring employees, restructure to meet the new level of demand. If you decide to hire employees, ensure you can trust them to deliver the same quality of service that you offer yourself.

How do I handle taxes for my cleaning business?

This depends on the type of business structure you operate under. You and your business are considered one entity for tax purposes as a sole proprietor. Corporations pay taxes based on profits and dividends distributed by the corporation. An LLC can file as a sole proprietor or a corporation. A tax attorney can advise you on different business structures and their tax advantages/disadvantages.