Are you looking to start your own cleaning business? As part of your business plan, make sure to consider all the startup and operating costs to open and run a cleaning business.
We’ve identified that it costs anywhere from $73,500 – $167,500 to start a cleaning business plus $23,500 – $30,000 in operating costs per month to run the business the first few months.
Want to know more? In this article we’ll go through all the different costs you will need to budget for before you can open your own cleaning business. Read on!
Residential vs. Commercial Cleaning Business
First, let’s clearly define and distinguish 2 very different types of cleaning businesses: residential and commercial cleaning businesses.
Residential typically focuses on homes and private residences. Instead, commercial cleaning businesses offer cleaning services for businesses (offices, factories, hotels, etc.).
Logically, a residential cleaning business can require very little money to start: anyone can start a residential cleaning business and go door-to-door with basic cleaning equipment.
Instead, a commercial cleaning business will require much more equipment (as your customers will not provide it), vehicles to transport it, space to store it, and manpower.
Commercial cleaning can often be more profitable vs. residential cleaning. Indeed, commercial cleaning businesses usually sell more expensive services as part of their cleaning services (e.g. floor waxing, window washing, and deep cleaning/disinfecting).
In this article we’ll focus mostly on commercial cleaning businesses. Also, we use the example of a commercial cleaning business throughout this article to give you a clear overview of the costs you can expect to start a cleaning business (and not residential).
Let’s now dive into the different costs you can expect if you decide to start your own cleaning business.
Cleaning Business Startup Costs
Depending on the type of cleaning you intend to undertake, your start-up costs will vary. Generally speaking, a domestic cleaning service will be less expensive to launch, but commercial cleaning, which has the potential to be more lucrative, has better earning potential.
Fit Small Business reports that the initial fees for certain cleaning franchises can be as low as $3,500, while those for others can reach $200,000 and include an office, a vehicle, and a variety of equipment.
Also, if you decide to go for the franchise route, it’s important to keep in mind that not all cleaning franchises are cheap: some will require you to invest a minimum of $200,000.
As you can notice, startup costs vary significantly according to factors like commercial vs. residential cleaning, the number of staff, quality of equipment, etc.
So, we have given you a clear overview of all the essential costs you can expect to start a small (4 employees) commercial business below.
There are 2 types of costs: startup costs and operating costs.
Note that these costs are for illustrative purposes and depend on several factors which might not fully apply to you.
|Office lease deposit||$15,000|
|Cleaning equipment & machines||$40,000|
|Vehicles||$10,000 (leasing) – $100,000 (buying)|
|Legal & licenses||$500 – $4,000|
|Insurance||$8,000 – $12,000 (per year)|
|Total||$73,500 – $167,500|
Office Lease Deposit
For your cleaning business, you’ll likely need to rent an office as well as space to store the cleaning equipment and the vehicles.
If you choose to lease a property, you must agree to inhabit it for a number of years and provide a refundable security deposit.
Also, your office space will depend on the scale of your operations.
Whilst a residential cleaning business can require very little space (an office and some storage), cleaning businesses typically require more space instead. Indeed, you will have to rent (or buy) space to store your machines, equipments, cleaning supplies, vehicle(s) and the office to run the administrative tasks.
For example, assuming you need 2,500 square feet for a commercial cleaning business, then you would spend approximately $5,00 in monthly rent.
As you must keep a provision for a security deposit equivalent to three months’ rent, you’ll have to pay $15,000 upfront.
Cleaning equipment & machines costs
Depending on the type of cleaning business you choose, the initial costs for cleaning supplies and equipment will range significantly..
For example, a residential cleaning business may require only $300 to $600 of equipment and cleaning supplies:
- A premium vacuum can cost anywhere from $200 to $300
- Each cleaning solution costs $10
- A broom costs $10
- A mop costs $20
- $20 for cleaning materials
Instead, a commercial cleaning business will typically require more money. For example, a ride-on commercial-grade floor cleaning machine will cost $10,300 for the smaller units, and as high as $20,045 for larger units more suited for very large industrial complexes.
A few other examples of machines you would need for a commercial cleaning business include:
- Carpet extractor: from $1,100 (box units) to $18,000 (ride-on)
- Manual push sweepers: $500 – $2,000
- Walk behind automatic sweepers: $2,500 – $5,000
- Basic walk-behind push sweeper: $150 to $500
- Walk-behind push sweeper: $750 – $1,000 or $2,000 – $3,000 (battery powered)
- Walk behind electric sweeper: $3,000 – $4,000
- Battery-powered indoor sweeper: $5,000 – $6,000
- Battery-powered outdoor sweeper: $14,000 – $15,000
Also, you will likely need to pay for an annual plan from the manufacturer that will take care of inspections and service for an additional $500 to $1,000 per year per machine.
Legal & Licenses
To start a cleaning business, you must stay prepared to spend anywhere from $700 to $4,000 to draft customer contracts (residential or commercial cleaning), and employment contracts.
Also, costs will include insurance policies and permits to operate your business. Here is a quick cost break-up for you:
- Registering a company can cost between $40 and $60
- Licenses & Permits will cost between $75 and $425
When it comes to exclusive licenses, whilst some states do not require any (Florida for example), many other states do.
Cleaning business insurance costs
You should budget money to become completely bonded and insured if you want to start a cleaning business.
For a small cleaning firm, general liability insurance might cost anywhere from $350 to $8,000 per year. You might also budget an additional $2,000 yearly for workers’ compensation in case you or an employee gets hurt.
For complete insurance, larger commercial janitorial services might budget between $8,000 and $12,000 annually instead.
Cleaning business vehicles costs
When starting a cleaning business, you might want to consider buying a vehicle (van).
It can cost anywhere from $5,000 to $50,000 depending on whether you lease or buy the vehicle. Also, depending on the number of employees and services you offer, you may need multiple vehicles.
For example, a commercial cleaning business with 2 teams of 2 janitorial employees working on different sites will require 2 vans to carry heavy equipments and cleaning supplies.
Cleaning Business Operating Costs
In addition to the one-off start-up costs before opening your laundry shop, you must also consider the total recurring cost of running the business.
The operating costs depend on the type of services you offer and the size of your business. Here’s a brief overview of the operating costs you can expect for a small commercial cleaning business with 4 employees:
|Operating cost||Amount (per month)|
|Equipment and cleaning supplies||$1,000 – $5,000|
|Marketing||$500 – $2,000|
|Other (utility bills, gas, etc.)||$2,000 – $3,000|
|Total||$23,500 – $30,000|
Cleaning equipment and supplies costs
Depending on the size and kind of the company, the typical monthly cost of cleaning products can vary substantially. You’ll require a plethora of items for your cleaning company. Even if you are performing house cleaning or other cleaning services, the following tools and supplies might be necessary:
- Trash bags
- Plastic buckets
- Rubber gloves
- Floor cleaning solution
- A vacuum cleaner
- Cleaning rags
- A cleaning supply cart
- Dust towels
- Carpet blower
While a huge warehouse or industrial plant would require materials costing several thousand dollars, a small office might just require a few hundred bucks.
You should also be aware that some equipment and supplies will only be purchased once. A vacuum cleaner or carpet blower, for instance, will only need to be purchased once. However, regular replenishment of the cleaning products will be required.
For example, the monthly cost of the replenishment of the equipment and cleaning supplies is around $1,000 for a residential cleaning business.
Instead, commercial cleaning services will cost significantly more to replenish cleaning supplies. The amount will depend on the size of your business.
The size of your activities will significantly impact how much office space you need.
Assuming you rent a 2,500 sq. ft. space at $30 per sq. ft. per year, you would pay about $5,000 per month in rent.
Cleaning staff costs
Depending on the hourly rate you intend to pay and the number of staff you’ll start with, labor costs can vary significantly.
The average janitorial worker earns $25,000 per year. So assuming you operate a commercial business with 4 employees, you would pay about $10,000 per month in salaries (including taxes and benefits).
Assuming you pay yourself a salary of $45,000 per year as a manager and CEO, the total cost per month would be around $15,000.
Like any other new business, you will need to incur marketing and advertising expenses to attract customers.
Here is a few examples of operating marketing expenses that you will have to incur when starting a cleaning business:
- Logo: $20 – $100
- Visiting Cards $40 to $150 Brochures: $65 – $300
- Social Media Sponsored Content: $10-$100
- Website page: $500 – $20,000
Typically, marketing expenses will often be higher during the first six months of business. Indeed, in the beginning you will need to attract new customers, before you can rely on organic growth (word-of-mouth) later on.
For paid ads, pay-per-click advertisements and social media ad campaigns, you can set a monthly budget. Some people spend up to $500, while others can spend up to $2,000 or more.