How much does it Cost to Start a Cleaning Business?

How much does it cost to start a cleaning business? Could you start on a shoestring? Will you have to take out a loan? Do you have money to burn?

What are the costs of running a cleaning business? You have employees, labor taxes, income taxes, property taxes, supplies, equipment, marketing costs, accounting, legal fees, sales costs, office supplies, insurances, and so much more. Seems overwhelming! It's no wonder some people believe they need thousands to start their cleaning company. 

Let's look at other businesses. According to Google, a restaurant can cost $500K-$2M to start. A daycare at home costs $50K. A retail store can cost $250K-$3M depending on your niche. A bowling alley costs $15K per lane, at a minimum. But these are traditional brick and mortars. A cleaning business is basically a home-based business. 

At a minimum, to start earning income, you'll need supplies (e.g. glass cleaner, a multi-purpose cleaner, etc.), a vacuum, maybe a mop, transportation (e.g. car, Uber, bus pass, etc.) and general liability insurance. Maybe, depending on your state, you'll need some sort of licensing too, but that's typically income-dependent. 

Let's say you do some marketing for FREE! Let's say you print up some flyers and pass them around town. Let's say you do some social media marketing. Let's say you go door to door to introduce yourself. Let's say one of your touch points connects with the right future customer and they give you a call (BTW, Google Voice is free). Ring...ring...Hello?! You're off to the races with your first customer. Let's say you negotiate $200. Hooray! Time to celebrate. But wait?! How will you clean it with $0 in your bank account? Borrow a vacuum. Borrow a mop if needed. Look under your kitchen sink and you probably have 2-3 products you can use. 

You get started. BTW, as you read this, this applies to both small homes and small offices. If you want to go crazy and scale big, go for it. My previous company's first client through the initial owner was a 14-story office building. Go big or go home, I guess.

Below is a hypothetical over the course of 21 days of cleaning (it could take a month, or even more, depending on ambition):

Day 1 of cleaning - $200 income (again, estimating low here)

Day 2 of cleaning - Another $200

Day 3 of cleaning - Another $200

At the end of three days of cleaning, you have $600. You return the vacuum and buy a new one. You replenish supplies. And you spend $100 or so on a $500K-$1M insurance policy. Your take - close to $0 after 3 days. But don't get discouraged. Let's repeat...

Day 4 of cleaning - Another $200

Day 5 of cleaning - Another $200

Day 6 of cleaning - Another $200. 

So at the end of 6 days of cleaning, you're pulling in another $600. Let's take $10 more in supplies. Vacuum is paid for. Your insurance is covered. Let's get you registered with your state/locality to make it legit. Let's say $100 for that. And let's protect yourself with a LLC at another $100. These are round numbers. In some states, a new LLC can be less than that. It could be more. But let's bump it up to $290 between the two plus $10 more for supplies and some gas. You now have $300 you don't know what to do with. Let's put that in a Tax HOLD account (hat tip: Profit First by Michalowicz). Now your income taxes are more than covered.

Day 7 of cleaning - Another $200

Day 8 of cleaning - Another $200

Day 9 of cleaning - Another $300

Wait for it....Let's hire a sub!! It's sub time. Let's go high in relation to the low $200 to $160. Remember, subs pay for their supplies, gas, etc. Let's say you continue your schedule with the same low, low price for a home or office. 

Day 10 of cleaning - $400 (remember, doubling your efforts)

Day 11 of cleaning - $400

Day 12 of cleaning - $400.

Woohoo, that's $1200. You paid out to the sub $480. Your gross profit after your $10 in supplies is $710 in just 3 days. You drop all of this on marketing (remember, tax write-off). What can $700 get you? Well, it'll get you a basic custom-designed website. Why not? 

To recap...after 12 days, you have all of your hired labor paid for. You have a new vacuum you use. You have all of your supplies paid for. You're fully insured. You're legit in terms of registration. You have $300 in your tax savings account. You have a growing business. 

You saw the magic of cloning yourself with the sub. Let's do it again. You pay $160 per property. You hire another sub, so now you have 2, and you begin to scale.

Day 13 of cleaning - $600

Day 14 of cleaning - $600

Day 15 of cleaning - $600.

Labor paid out is $320/day or $960 over these 3 days. Your income is $1800. Remember, you still worked just 1 property each over those 3 days. You spent $10 on your supplies. You're now at $830 in net profit. 

So, website paid for. Insurance paid for. Labor covered. Tax saved. Business registration and LLC done. And you have $800 left over. Let's put $400 into savings. What to do with the other $400? Let's invest it back into marketing. Let's focus on SEO. This way you can ease up personally on the door-to-door. It'll take time but it'll happen if you hired the right marketer. You can now divert that time to networking and asking for referrals.

Let's continue. Let's say you hire a 3rd sub. You still have a crappy target of $200/house or office. You can figure that one out later (there are bigger properties out there you know). So...

Day 16 of cleaning - $800

Day 17 of cleaning - $800

Day 18 of cleaning - $800

Your total income over 3 days is $2400. You paid subs $1440. You still worked your own properties. You still sunk in $10 on cleaning supplies. Insurance is paid for. Biz registration covered. Website built. SEO engaged. Your time is a little more freed up to market and ask for referrals. Not too shabby because you have $950 in net profit. What to spend it on? Well, maybe you can give it to me? My address is 615 Cap....just kidding. What to do though? What will $900 get you in business? Maybe invest in direct mail? Maybe hire someone to go door to door? I'm not a fan of the latter. Let's do direct mail. You take the $900 and create an identity package for your business complete with a logo and letterhead. You pull addresses through Google. With a $0.60-something stamp, you're sending 500-600 letters after the dust settles, with your flyer included. Do you think you win at least 1 new client with that? I think at least 5 for sure. Let's say you still haven't learned your lesson and you targeted $200 clients. Let's continue but this time you add yet another sub to help you.

Day 19 of cleaning - $1000

Day 20 of cleaning - $1000

Day 21 of cleaning - $1000

Whew. $3000 in 3 days. That's good. You take out your $10 for supplies. $1920 went to subs. That leaves $350/day in profit or $1070 over 3 days. Now you're beginning to see some success. At $1000, let's say you take half and save it. What to do with the other half? Splurge? Why not?!

Let's stop here. This is working basically every week day for a month. Totals:

Income: $9000

Labor: $4800 - 53.3%

Supplies/equipment: $540 - 6%

GROSS PROFIT: $3,660 - 40.7%

 Insurance/varies: $100 - 1.1%

Business Registration/year: $100 - 1.1%

LLC/year: $100 - 1.1%

Website/1X cost only - $700 - 7.8%

SEO (per month) - $400 - 4.4%

Identity branding/1X cost only - $900 - 10%

NET PROFIT: $1,360. Cash in hand. 

READ THIS: IT WILL NOT WORK THIS PERFECTLY. But I purposely went low in these numbers. I am certain you can find bigger properties (well, ok, if you ever visited Natoma, KS, you probably might strike out). There are way bigger properties. In commercial, our average client size was $6000/mo. and that's working 1 FT person and maybe some change extra. Imagine this model, scaling up, with 18 new recurring clients. You'd be a millionaire. 

So, back to the original question....how much does it cost? It costs less than $500 to get started with purchased supplies. It's free to get started with borrowed supplies on a shoestring. No need for loans. No need to rack up credit cards. It's easy peasy and very scalable.