How to start a commercial cleaning business

Although the commercial cleaning and janitorial industry was disrupted by COVID-19 and saw a 5.5% decrease in industry revenue in 2020, the industry has stabilized and is poised for growth in the coming years.  

In this article, I want to share with you how you can start your own commercial cleaning business with the potential to make $100,000+ per year in profits.

We have created a commercial cleaning income and expense excel spreadsheet that is perfect for any commercial cleaning business. I have created a demo video that will walk you through what to put in each section of the spreadsheet in order to have realistic, industry standard projections that you can include in your commercial cleaning business plan or SBA loan application. 

Next, let’s dig into the startup costs, revenue potential, common expenses and ultimately the profit you can expect to earn with your cleaning business. 

How Much Does It Cost to Start A Commercial Cleaning Business?

The answer to this question will vary depending on what services you choose to provide as a commercial cleaning business. For instance, if you provide thorough floor cleaning, like vacuuming and shampooing carpets, then you’ll need to purchase a vacuum and a carpet shampooer. Once you figure out your particular service offerings, it’ll be easier to decipher how much money you’ll need to start because then you’ll know what specific supplies you need to buy. 

So what cleaning supplies do you need to buy for your startup commercial cleaning business, and how much do they cost on average?

• Mop ($5-$12)
• Mop/Utility bucket ($5-$10)
• Floor cleaner ($3)
• Duster ($9) -includes refills 
• Vacuum ($79-$120)
• Broom w/ dust pan ($10-$20)
• Microfiber cleaning cloths ($11)
• Garbage bags ($6)
• Multi-Surface cleaner ($2-$4)
• Paper towels ($10)
• Disinfectant wipes ($9- 3-pack)
• Disinfectant spray ($4)
• Spray bottles ($1 per bottle)
• Window cleaner ($8 for a gallon)
• Bleach ($4)
• Cleaning Vinegar ($2)
• Toilet brush ($8-$10)
• Toilet bowl cleaner ($3)
• Reusable cleaning gloves ($3-$5)
• Necessary certifications (varies)

These amounts are based on approximate prices for each of these items found particularly at Walmart. Assuming you’ll want to hit the ground running with your new commercial cleaning business, aiming to get these cleaning basics should be enough to get you started. And of course, keep in mind that you won’t have to buy all of these items all of the time–some items, like a broom, mop bucket, and vacuum cleaner will be less likely to need replacing as often as other supplies.

Something else to consider is the concept of buying in bulk. Many people strictly buy in bulk because the price per measure of a product is generally less when bought in bulk.

What are the Operating Expenses of a Cleaning Business?

Now that you have the basic supplies to get started, you’ll need to consider how much money it will cost you to operate your business on a weekly or perhaps monthly basis. Like any business, there will be fixed expenses and variable expenses. The following are some of the fixed expenses you’ll need to consider when calculating the operating expenses:

• Advertising
• Various licenses
• General liability insurance 
• Workman’s comp insurance 
• Auto insurance for company owned vehicle
• Payroll

Some of these expenses may not be applicable for your business. Payroll, for instance, will depend on whether you are hiring employees or starting out working solo. Similarly, you may not have a vehicle that is owned by the company, therefore you wouldn’t need to purchase auto insurance outside of what you may already have for your personal vehicle. Insureon, which provides small business insurance, has broken down what types of insurance you may want to consider when starting your commercial cleaning business here. 

Along with your fixed expenses, there are some variable expenses that you’ll need to consider as well. Variable expenses are those that may not be consistent on a week to week basis, or exist on an “as needed” basis.

Some variable expenses might include

• Replacement cleaning supplies
• Fuel to get you from your home base to your various clients
  

Our janitorial business expense spreadsheet will help you to organize and make some pretty solid estimates for how much it will cost to start and run your new commercial cleaning business.

How Much Can You Generate In Sales from a Cleaning Business?

Now that you know generally what it’s going to take to get your business started, you’ll want to know about how much you can generate in sales in a year once you’ve established your clientele.

The amount of revenue you can generate is going to depend deeply on what you charge for your services, how many clients you can serve in a week, size and scope of client buildings, and how many employees you have under your hire, if any.

For this example, let’s assume you are the only employee and you have five regular clients that you serve in a week–one for each day.

If you’re looking to make $100,000 in sales, you’ll need to make approximately $2,000 per week. On average that means you’d have to charge your clients $400/per day of cleaning services for a total revenue of $8,000 per month. The amount you charge per client will vary depending on the scope of the space to be cleaned, but you’ll have to average $2,000 per week.

There are a lot of variables and factors to consider when it comes to how much you can make from your commercial cleaning business. Using our spreadsheet template will allow you to change variables and see how your projected income will be changed.

How Much Profit Can You Make from a Cleaning Business?

Much like your sales revenue, your yearly profits will vary based on the circumstances of your commercial cleaning business. For our example, we decided that this is a solo operation, servicing five clients on a weekly basis. You can make the choice of whether you’ll require payment from your clients weekly, or on a monthly basis. If it is on a monthly basis, you may not see payment for your services until weeks after they have been done. That being said, your initial start up costs won’t likely be matched until after the first or second month of steady client work. 

For your first year, you’ll have to consider the costs of the required certifications, and start-up supplies. And because of those start-up costs, your first year will look different than the second and third. 

Based on our research, it is safe to assume you may need anywhere from $1,500-$4,000 to get training and certifications to start your commercial cleaning business. That number may vary depending on what certifications you choose to get outside of the basic certifications.

On top of certifications, you may find yourself spending anywhere from $300-$600 in your first month for the initial supplies needed to effectively clean any given space. 

So you may be looking at a revenue of $8,000 - $4,600 in expenses for a profit of $3,400 in your first month. That, however, doesn’t include advertising costs, insurance, and other fixed expenses.

The expense spreadsheet will allow you to input all of your monthly costs, both fixed and variable, to help you see what your profits would actually be in a month or year.

Compare your potential profits to other types of cleaning businesses:

• Pool Cleaning Profit Margin
• Carpet Cleaning Profit Potential

Frequently Asked Questions about Cleaning Businesses

Some of the most common questions from entrepreneurs that are considering whether to start a commercial janitorial service include:

What certifications do I need to start a cleaning business?

There are a few certifications you may want to consider when starting your commercial cleaning business that may help you to have more credibility when searching for clients. One of the more common certifications is CMI Cleaning 101 program provided by the International Sanitary Supply Association (ISSA). There are also Advance Pro training programs that will give you training in a number of different areas including how to properly clean and sanitize a toilet and dealing with hazardous materials. Another certification you’ll need is an SBA small business certification. The Cleaning Business Boss has provided a thorough breakdown of information regarding cleaning business certifications here. 

How can I market my new commercial cleaning business?

There are a plethora of ways that a business can market themselves these days. And there are a lot of options that either cost nothing, or have a very low cost for their worth. Some of the best ways to market your new commercial cleaning business would be to create and establish a website, utilize social media, and establish a local network to help spread the word. These things are basic, but incredibly helpful to your marketing endeavors. Forbes has compiled a Small Business Marketing 101 article to break down some of the best ways to market your business. We recommend you check it out.

What should I charge for my janitorial services?

Pricing services is possibly one of the more challenging aspects of starting a new business. There are many ways one can go about pricing, whether it’s an hourly base-rate or even a rate based on square footage of a given space needing to be cleaned. And whatever method you choose, you have to consider local rates, expenses, how labor intensive your services may be and more. It’s tough to say just how much you should charge for your cleaning services, but JobberAcademy has put together a very thorough and helpful article on how to price your cleaning services that you might want to check out.

What is the best type of cleaning business to start?

There are many types of cleaning businesses that you could start, and the "right" type is really based on your personal preferences. We wrote in depth about how to start a carpet cleaning business and how to start a pool cleaning business so that you can get an idea of the pros and cons of each.

There are a lot of things to consider when looking to start a commercial cleaning business. So if you want to see exactly how your numbers would work together for starting your cleaning business, we recommend you take a few minutes to watch the demo video that will walk you through our cleaning business financial projections template here. 

And if you have any questions about our expense and income tracking spreadsheet, feel free to reach out at support@projectionhub.com

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Photo by Karolina Grabowska from Pexels

Photo by Tima Miroshnichenko from Pexels