Many people have been writing in and asking us “what’s the cost to get started in your own cleaning service”.
While there is no real “exact” cost as everyone will do things differently, I can give some ballpark estimates that should clue you in.
But before I get to pricing, I want to make mention that most people make two major miscalculations when considering starting their own business.
- They mistakenly believe that a ton of money is required.
- They are under the impression that they need all the money at once.
Now let me address those two issues…First, I think you’ll be amazed at just how little is needed to get the ball rolling. This doesn’t mean having more money available is a bad thing, as the more you have the faster the process will go to a degree.
With that said, I firmly believe slower is better in the beginning, as you need time to learn the ropes. Far too many time people jump in wallet first, and waste a ton of money in the process.
Secondly, contrary to popular opinion I might add, you don’t need all the money at once to get started. The goal is simply to spend just enough to get the ball rolling, then concentrate on getting customers to finance the rest of the process.
Most people do the exact opposite unfortunately, spending every last dollar they have in the hope that they will get some customers. Sadly this approach doesn’t work that well. This results in loss of valuable capital not to mention a draining of ones enthusiasm.
Now lets move on and discuss the basic costs associated with starting a cleaning service. Keep in mind that I’m not going to be breaking things down in spreadsheet form here. This post is just going to touch the big issues that most people worry about. Here we go…
Required costs associated with starting a cleaning service.
1 – You need to register the business. This has a lot of variation of course, but the cheap route would be sole proprietor. I live in NJ, and for me about 10 years ago it was only a $25.00 filing fee down at my local County Clerks Office. As you can see, that is quite reasonable.
Now if you were interested in going the LLC (Limited Liability Company) route your costs would be a bit higher. Current rates run about $99.00 to $399.00 by online vendors to get your paperwork completed to become a LLC. Either way you go, the costs are within just about everyone’s reach.
NOTE: Once you get the name registered, you will need a business bank account. Generally you will need to deposit about 100 bucks to open this account. Technically speaking, this money doesn’t really count against the total start up because you are only making a deposit, not spending any money.
2 – Insurance. Now you need to look into liability insurance. When I started it was about $700.00 a year for entry level coverage. Keep in mind, you don’t pay it all at once, it’s usually quarterly and I’m told some states allow monthly payments.
Remember, don’t worry too much about insurance as your customers will foot the bill for this expense. This is because even with a very small cleaning account you should pocket $100.00 profit per month, which will easily cover your insurance payment.
If you don’t know where to start on insurance then check out BOLT Insurance. This company provides free quotes by just filling out a short form. What I like about them is that they give you several quotes so you get to compare prices from different companies.
NOTE: Technically, you are now in business. Not as much as you thought huh? With that said lets add one more item that is a must have.
3 – Get business cards made. This should only set you back about $20.00. You’ll find some great ideas for your business cards by visiting our sister site, which is in partnership with Vistaprint. So to check out some pre made business card designs just for the cleaning business click here.
Could I keep going on and on adding more things in, yes I could. But what I just described is a bare bones set up. After you do the above, you need to spend your energy getting accounts, preferably cheaply. If you need ideas for getting customers on a shoestring budget click here.
Once you do that, the whole operation can be “self funding”. What I mean by that is this, once you get several good accounts under your belt, they pay for your expansion if you play your cards right and reinvest your profits into getting more and more accounts.
Now I know many of you must be wondering why I didn’t include any supplies in the start up cost section above. The reason is there is no need to spend a dime on items that you have absolutely no need for. The moment you need supplies, you simply go get them.
I know this sounds counter intuitive, and maybe it is. But if there is one thing you need to learn when running a business it’s don’t spend money on something UNTIL you need to. Look at is this way…
Would you buy a second set of tires for your brand new car just so that when you needed new tires you had them? No, I didn’t think so. So why do the same here? The focus needs to be on getting a company registered, then start getting customers. It’s as simple as that!
Now when you do land your first account, going out on a limb and purchasing some supplies has no risk associated with it. Besides, supplies don’t cost much anyway. If you went the cheap route AND assuming you have no supplies to speak of the cost would only run you anywhere from $75.00 to $200.00.
This would give you a cheap vacuum and some basic supplies, enough to perform the basic service and get the ball rolling. I would not go crazy and purchase anything beyond this basic setup until you have a need for it.
If you were to get some floor equipment, like a floor machine, wet vacuum or carpet cleaning equipment, it may sit idle for months. That money would be better spent getting some customers who pay you month after month.
Only buy this type stuff when you “know” it will be used within a few weeks. This helps preserve your cash flow and protects you from needlessly running short on money. Why makes things tight if you don’t have to?
Before I wrap this up I would like to touch on getting bonded. Many people worry about the cost of this. Bonding is generally very inexpensive and is nothing to fret over. For a ballpark figure, expect to pay around 3% of the face value of the bond.
In other words, it should only cost $150.00 to get a bond valued at $5,000. Once you get bonded, and someone asks you if you are, all you need to say is “yes, I have a $5,000 bond against theft”. That satisfies the customers!
Saying you are “bonded” is nice, but I would not add it to the mix until you land your first customer. On the whole very few customers will ask you about this anyway. So I suggest you just add it asap when you get your first paying account.
As you can see, it does not cost a lot to get started. It’s probably the single best business to start on a shoestring because the up side is just so high. In fact the upside is as high as you want it to be.
So if you are looking to get started, stop worrying about “all that money” all the naysayers say you need. At the end of the day a few hundred gets you into the game and started in your own cleaning service.
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