Do you want to know exactly how much it cost to start a cleaning company from home? If YES, here is a detailed cost analysis for starting a cleaning business and raising finance. The cleaning industry provides several different services.
Franchises in this large industry mostly fit into one of three areas: cleaning and janitorial services, carpet and upholstery cleaning services, and dry cleaning and laundry services.
This industry has a low level of capital intensity which is similar to other service industries. In 2016, for every $1.00 spent on wages, industry operators will typically only spend $0.017 on capital investment. Capital intensity is roughly the same from 2010 through 2015.
However, over the past decade, industry operators have invested in green cleaning products and equipment such as floor scrubbers that use less chemical products and machines that ionize water to help lift dirt particles. These investments can help attract environmentally conscious clients and save industry operators chemical cleaning costs over time.
The cost analysis as it relates to starting a standard cleaning business in the United States of America, Canada, United Kingdom, and Australia can be said to be almost the same except for few variations.
For example, the cost of setting up a full-service state of the art pressure washing cum cleaning facility which has the following features: a seventy foot fully automatic tunnel; 3 high pressure wand self-service bays; 5 vacuum stations complete with fragrance and carpet shampoo dispensing machines,
Insulator washers with a pump pressure of about 1000 psi and a nozzle pressure between 500 and 750 psi, centrifugal water pump, stainless steel water storage tank, high-pressure water hose, high-pressure dead-man type water wash gun, electrical grounds for the wash gun and washing system and chemical supplies for cleaning are same especially when benchmarked against the US Dollars.
Other factors that may be slightly different in terms of costing when it comes to starting a standard cleaning business in any of the countries listed above are cost of labor, cost of transportation and logistics, local tax, business incorporation fee, and rent/leasing amongst other factors.
Over and above, when it comes to starting a medium scale cleaning company, you should be prepared to either rent or lease a standard and centralized facility; this is going to be one of the areas where you are expected to spend the bulk of the start-up capital.
Estimated Cost of Opening a Cleaning Business
These are the key expenses you are expected to make when starting a medium scale but standard cleaning company business in the united states of America;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as accounting services (software, P.O.S machines and other software) – $3,300.
- Marketing promotion expenses for the grand opening of the cleaning company in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
- The cost for hiring business consultant (including writing business plan) – $2,500.
- The cost for insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- The cost for leasing a standard facility in good location – $150,000
- The cost for remodeling the facility – $5,000.
- Other start-up expenses including stationery ($500), phone and utility deposits ($2,500).
- The operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The cost for start-up inventory and standard cleaning machines and equipment (the cost of setting up a full-service state of the art pressure washing cum cleaning facility which has the following features: a seventy foot fully automatic tunnel; 3 high pressure wand self-service bays; 5 vacuum stations complete with fragrance and carpet shampoo dispensing machines, Insulator washers with a pump pressure of about 1000 psi and a nozzle pressure between 500 and 750 psi, centrifugal water pump, stainless steel water storage tank, high-pressure water hose, high-pressure dead-man type water wash gun and Electrical grounds for the wash gun and washing system and cleaning chemical supplies) – $250,000
- The cost for the purchase of trucks/vans for conveying workers and equipment to sites – $45,000
- The cost for store equipment (cash register, security, ventilation, signage) – $13,750
- The cost for the purchase of furniture and gadgets (Telephone, printing machines, computers, tables and chairs et al): $4,000.
- The cost for building and hosting a website: $600
- The cost for opening party: $2,000
- Miscellaneous: $5,000
You will need an estimate of seven hundred and fifty thousand dollars ($750,000) to successfully set up a medium scale but standard cleaning company in the United States of America. Please note that this amount includes the salaries of all the staff for the first 3 months of operation and it applies to a cleaning company that can carry out pressure cleaning and any other form of cleaning services on a commercial level.
Starting a small scale but standard cleaning company business that can only carry out routine cleaning services for homes and offices in the United States of America will cost about five thousand dollars to fifteen thousand dollars ($5,000 to $15,000). Please note that it is cost effective to start a small scale cleaning company.
When it comes to starting a standard and large scale cleaning company with several outlets in key cities in the United States of America, a cleaning company that can carry out pressure cleaning and any other form of cleaning services on a commercial level and a company with the intention of selling franchise, then you should look towards budgeting well one million, five hundred thousand dollars ($1.5 million).
How Much Does It Cost to Buy a Cleaning Business Franchise?
In the United States of America, the Average Cost of Purchasing a Cleaning Company Franchise is $30,000. Examples of 3 Well – Known Cleaning Service Franchising Companies in the United States of America are;
- CleanNet USA® Inc.
- Vanguard Cleaning Systems
- Stratus Building Solutions
Factors Influence the Cost of Opening a Cleaning Business
Type of Cleaning Services
One of the major factors that can influence the overall cost of opening a cleaning business is the type of cleaning services you want to run.
There are various niche ideas when it comes to the cleaning business and these can include; residential cleaning, commercial cleaning, specialized cleaning (e.g., carpet cleaning, window cleaning), crime scene cleaning, or a combination of these.
The fact that each type of cleaning service may require different types of equipment and supplies means that the cost of starting any of them will be different.
The Cost of Obtaining Licensing, Permits, and Insurance
Another major factor that can influence the overall cost of opening a cleaning business is the cost involved in obtaining the required licenses, permits, and insurance needed for the business.
As expected, you will need to budget for Business License, Trade Name Registration (DBA or Fictitious Name), Employer Identification Number (EIN), Sales Tax Permit, Occupational License, Health and Safety Permits, Environmental Permits, and Contractor’s License (if applicable). You will also need insurance policies such as general liability, workers’ compensation, and commercial auto.
The Cost of Cleaning Equipment and Supplies
The cost of your cleaning equipment and supplies is another major factor influencing the overall cost of opening your cleaning services business. Basically, you should budget for vacuum cleaners, mops, brooms, cleaning solutions, chemicals, protective gear, uniforms, and transportation vehicles.
Please note that the cost of your cleaning equipment and supplies will depend on the quality, quantity, and specific needs of your cleaning services.
Your Staffing Cost
Another cost that can influence the overall cost of opening a cleaning services business is the cost of staffing the business.
This cost is associated with hiring and training staff members, and it is a significant cost that can take a sizeable chunk of your startup capital. Please note that your staffing cost includes wages, benefits, background checks, uniforms, and any necessary training programs for your employees.
A small cleaning business may not require huge staffing costs, as you can start with a small team and expand as you grow. But if you plan to start a well-structured, well-equipped, and standard cleaning business, then you should make sure you have a reasonable budget for staffing.
When it comes to starting a standard commercial cleaning company business on a large scale, you would need the services of the following professionals;
- Manager (Owner)
- Human Resources and Admin Manager
- Marketing and Sales Executive
- Client Service Executive/Front Desk Officer
- Cleaners/Pressure Machine Operators
- Truck/Van Driver
The Cost of Marketing and Advertising Your Cleaning Business
The fact that you are starting a new cleaning business means that you should make sure the company is in the eyes and consciousness of your target market. In order to achieve this, you must make sure you invest in advertising your cleaning business.
The costs for advertising your cleaning services business may include website development, online advertising, printed materials, branding, business cards, flyers, signage et al.
The Location of Your Cleaning Business
Another major cost that will influence the cost of opening a cleaning services business is your choice of location. When we talk about business location, we are talking about how the location will affect the cost of rent, lease deposits, utilities, and any renovations required to get the cleaning business up and running.
As expected, starting a cleaning services business in a city like New York will be more expensive when compared to the cost of starting a cleaning business in Sioux City, Iowa.
The Cost of Insurance and Legal Fees
Another major factor that will influence the overall cost of opening a cleaning services business is the cost of insurance and legal fees. As expected, you cannot legally open a cleaning services business in the United States of America if you don’t have the required insurance policy coverage for such a business.
Insurance covers for a cleaning business can include; property insurance, general liability insurance, business interruption insurance, workers’ compensation insurance, commercial auto insurance, equipment breakdown insurance, and cyber liability insurance.
Please note that the cost of insurance can vary depending on factors such as location, size, and coverage options. You should also make provision for legal fees because you will need them during the setup process.
Ongoing Operational Expenses
Lastly, another factor that will influence the overall cost of opening a cleaning services business is your ongoing operational expenses. The fact that cleaning businesses require steady ongoing operational expenses means that there should be a budget for it.
Please note that the ongoing operational expenses to consider include; utilities (electricity, water), office supplies, cleaning supplies, vehicle maintenance, fuel, insurance, accounting/bookkeeping services, and potentially software for scheduling and invoicing.
Aside from creating a budget for your ongoing operational expenses, we usually recommend that anyone who wants to start a cleaning services business should have a contingency fund to cover unexpected expenses or unforeseen challenges that may arise during the initial phases of starting the business.
It is important to note that the factors discussed in this article are some of the major factors that can, to a large extent, influence the overall cost of opening a cleaning services business. Still, there are other factors that are not listed in this article that can also influence the cost of starting a cleaning services business.