How to Start a Cleaning Business
This is our guide to starting and Running a Successful Cleaning Business : Your Simple Guide to Fast Profit
Are you looking to start up you own business? Cleaning Services are always in demand, and needs are only projected to increase with urbanisation.
Is it worth Starting a Cleaning Business?
Combined with the relatively low start-up costs when compared to other types of businesses and high profit margins, starting a cleaning business is an easy and rewarding choice for aspiring business owners in Australia. The following cleaning business checklist details all the steps and tricks you’ll need to know to build your business from zero, up to match the six and upwards figured cleaning businesses already in the local market. Don’t delay today, follow our simple guide to begin the same journey many unknown business owners have in the past, as they grew their cleaning businesses from nothing, to some of the most dominant cleaning companies in Australia!
Choosing What Type of Cleaning Service to Provide
It’s best to begin by providing just a couple core services, allowing you to perfect your techniques and systems and keep things simple as your business kicks off.
For example, offering just domestic cleaning is common and foolproof start for many, as the demand is always there, and less equipment and training is required on your part. It is worth noting that generally, less specialised services for these reasons generally have more competition, but this should not be an issue, provided that you follow the strategies discussed later to establish your company’s position in the market.
More skilled services will require specialised equipment and further training which will incur higher start-off costs for you, but the lower competition allows you price your services higher. This is why we recommended adding these onto your repertoire as your customer base and reputation increases.
Keep in mind that for each extra service you add to your offerings, you will likely require more equipment and products and also further training and staff, so keeping it minimal in the beginning will not only make the business easier to manage for you, but also reduce your start-up costs.
It is much better and easier in most cases to provide a small number of simple, refined services as your business is still in its early stages, and then expand your services later on, when your business starts to build up traction and your customer base grows. Another important point to remember is that it is nearly impossible to offer everything to everyone, and it is in your best interests to specialise. If you were a customer requiring a specific service, would you pay more for a specialist or a jack of all trades, master of none?
You can also check out our article about What Types of Services Can Cleaning Companies Offer for more information
Setting Up Your Business
Disclaimer: The following information is for informative purposes only. Please consult a professional for legal and tax advice before establishing your business. We are not legal experts and are liable for the consequences of any decisions you make.
It is essential step for any business owner to decide on a business structure and setup the necessary taxes, insurance and required licenses. It is up to you to consult with a solicitor and accountant to outline what is necessary and best for your business but here is a basic outline of the general setup process:
Select Business Structure
Pick whether to register as either a sole trader, partnership or company after consulting with experts
Choosing to register as a sole trader is generally the easiest option as your business is seen as a separate legal entity, meaning that you can declare your income from your business on your tax return along with any other income you receive from other sources. This is cheaper the tax you pay will be at the same rate as individual tax payers.
A partnership is suitable when multiple persons are involved in the start-up of the business. In the case of a partnership all parties share the profits and loses as declared in a partnership contract.
A company is seen as a separate legal entity and as a result will result in additional setup costs and have different tax rates. Companies also have requirements regarding reporting and record keeping which must be followed.
Steps After Deciding on Cleaning Business Structure
- Apply for an Australian Business Number (ABN), this can be easily completed online, free of charge.
- Register the name of your business
- Setup a bank account for your business
- The past two steps are not necessary if you decide to register under your own name and use your personal bank account.
- Register for GST (not necessary if you do not expect a turnover of over 75k plus in your first year of trading)
- You may register for GST at a later date if you do not expect to meet the turnover limit, or you may register at the beginning if you wish. Keep in mind that you will need to add an additional 10% cost to your services if you choose to register for GST, however, this allows you to claim back GST on many of the goods and services you purchase for your business. You will also be required to complete either a monthly or quarterly monthly business statement.
- Apply for insurance
- To cover any potential damages in the case that an accident occurs on a client’s property, it is important that you take out public liability insurance. You will also need workers compensation insurance for any employees under your company.
There are many more types of insurance for businesses which you may consider getting. Again, consult with professionals to determine the other types and level of insurance you will likely need before making your decision.
- Check that you are following licensing and business regulations
- Make sure to check with the licensing body of the state which you operate in as well as your local council to determine whether there are any requirements or regulations to consider when running your business. Usually there are no requirements regarding the qualification of you and your staff however this may vary from state to state and depends on the nature of the services you provide. Although you may not be required to undergo any formal training or qualifications, a basic training course or qualifications for your cleaners (or possibly yourself) is recommended so that you can provide expert service to your clients.
- Hire a professional to help you manage taxes and business records
A good accountant will be able to assist you in your tax deduction claims and will run you through how to manage and record your invoices for your business.
Buying an Existing Cleaning Franchise or Starting Your Own Business from Scratch
You have two main options when starting your business, and each come with their own benefits and drawbacks. In this guide we will cover the nature of both options, which will help you decide which path is best for your circumstances.
Option 1 – Starting a Cleaning Business from Scratch
- You have complete control: it is completely up to you to decide how you wish to run your business and what services to offer, allowing greater flexibility
- Lower start up costs and less ongoing fees in comparison to a franchise
- Less hassle in the case that you decide to sell your business in the future
- No established brand: it is all up to you to spread the word of your business and build your reputation
- No assistance: getting the business started is more challenging as you will have to learn alone and improve on your mistakes as you go along
Option 2 – Buying a Cleaning Franchise
- Brand name is already established: existing reputations may make it easier to draw in customers
- Existing and proven business model
- Support and help available: sources of assistance and advice are there for when you’re starting off (keep in mind that the level of assistance available heavily relies on your franchisor, so you can’t always rely on it!)
- Higher start up costs and additional fees: franchisees are required to pay an upfront capital of several thousand initially, and split a percentage of their sales and also pay regular fees towards the franchisors
- Less control ad lower ceiling: franchisees face restrictions in how they may market and manage the business, which limits potential growth
- High influence of head-office success: just as the reputation the business is already established for you, negative customer opinion of the parent company will also affect public opinion of your business
Picking Your Tools and Cleaning Products
Consider the tools and products you’ll require for the nature of the services you’re offering before you jump to buy them. It is recommended to invest in higher quality equipment (doesn’t have to be top-of-the-line) as this will not only boost the effectiveness and efficiency of your services, but generally, better equipment will last longer making it worth the extra cost in the long term.
If you’re starting off with domestic cleaning, you will probably need a just some brooms and dustpans, mops, sponges, rags and buckets and a vacuum cleaner as well as cleaning products such as disinfectant spray, window cleaner and furniture polish. Be sure to get commercial grade and preferably environmentally safe cleaning supplies.
Work Out How Much to Charge
To calculate how much you need to charge for your cleaning service, you must first work out your cost for labor, materials, overheads and time it would take to travel from job to job (many forget about this). Then work out how much you need to charge for your cleaning service in order for you to make a profit. Do research and compare your price to the competition, at the end of the day, most customers are sensitive to pricing and most are likely to choose the cheapest cleaning service. This is especially the case when you are just starting out and have no clients which can vouch for your service. You’re free to negotiate prices with each new client, but it’s good to have a bottom line in mind so you’ll be able to stay in business. Unfortunately, many cleaning companies usually start out too cheap and either end up attracting the wrong type of customers and quit shortly after starting up or they end up working below the minimum wage.
For more information regarding house cleaning prices, check out our article about how much does house cleaning cost
Distinguish Your Cleaning Business Above the Competition
Good marketing can kickstart such as joining a good cleaning directory will help you increase your customer base in the beginning, but realise that the most reputable cleaners out there don’t need to emphasise on marketing, as they can rely on their existing customer base to spread the word for them! Therefore, the most effective way to consistently pull in clients is to simply provide the best customer-service possible.
Prioritise the satisfaction of your customers. Always aim to meet and even exceed their expectations by always greeting them in a friendly manner over the phone, ensuring that your services are delivered effectively and promptly and don’t make promises you can’t meet!
There are low effort methods of rewarding client loyalty, such as leaving thank you notes after the completion of a service, or personalised notes and discounts for repeat customers especially on special events such as their birthdays, which can significantly boost the quality of your customer service. These techniques will keep your customers returning for your services, and also increase the likelihood that they will recommend your customer to their friends!
Another option to set yourself apart is simply to focus on one particular service. Like mentioned earlier, cleaning businesses which specialise generally do better than general cleaning companies, as they know that they can be counted on to carry out the task effectively and efficiently.
Provided that you follow these simple steps and take the required measures, you will have a dominant business established in no time! Setting up your own cleaning business is not difficult and can be very rewarding and profitable in the long run, if you have a clear vision of your business, follow the advice of experts and work diligently to improve your services as much as you can. Don’t delay, break into the market today! With the right advice and effort, you’ll be running your own successful business in no time!