Owning your own cleaning business, despite what you may think, can indeed turn a profit. Even though there is a high rate of failure for starting a cleaning businesses, there are also many success stories for cleaning companies as well. A cleaning business can be profitable and a great small business idea. One of the key factors that keeps cleaning businesses alive is the high demand. Depending on your niche, there is a high demand for cleaning business services. For example, commercial cleaning is a widespread need. Providing weekly or semi-monthly cleaning to commercial buildings can mean long-term contracts and higher profits. Cleaning businesses focused on residential cleaning also have a large room for profit. Building a clientele list and expanding your services by establishing your own dedicated cleaning crew can lead to a steady profit stream for a cleaning business.
The profitability of a cleaning business varies depending on the niche. A commercial cleaning business has different opportunities for profit than a residential cleaning business does. In general, a commercial cleaning business generates more profit than a residential cleaning business. If you look at it based on size and scale, it is understandable why commercial cleaning businesses tend to be more profitable than residential businesses. Many factors contribute to the profitability, but overall a commercial cleaning business can expect to start out generating around $100,000 a year in profits.
Residential cleaning businesses have their own potential for profitability. Residential cleaning businesses have the ability to significantly increase potential business profits through methods such as reducing overhead costs. Residential cleaning businesses can also function with fewer employees. Even one individual can generate a decent profit running their own personal cleaning business with one other independent contractor. Depending on your pricing structure and overhead costs, a residential cleaning business with just the owner can typically earn around $50,000 annually. A residential cleaning business with employees or independent contractors can expect to earn about $70,000 per year in profits.
In addition to the more widely known commercial and residential cleaning businesses, many other niche cleaning businesses can also be very profitable. Choosing a specialty niche can lead to its own set of increased profits. Or perhaps you want to have a residential cleaning business that also specializes in one particular niche. By specializing in a specific niche, you can help increase your profits by choosing to offer a cleaning service with fewer expenses and more significant profit opportunities. Window cleaning services, carpet cleaning businesses, and car detailing businesses are examples of cleaning business niches that can help bring larger profits.
Commercial Cleaning Business Profits
A commercial cleaning business provides cleaning services to commercial businesses such as offices, schools, and government buildings. The commercial cleaning business market size was last calculated as 67.3 billion U.S. dollars. Additionally, commercial cleaning businesses earned an estimated total of 45 billion dollars in one fiscal year. Though there are many leading commercial cleaning businesses, there is still an opportunity for profit for new cleaning businesses as well. Commercial cleaning is unique because it will require more of an investment initially than a residential cleaning business. A commercial cleaning business will need to supply all their own equipment either by renting or purchasing it. Depending on what services your commercial cleaning business offers will determine what specialized equipment your company will need to purchase. Despite these somewhat high initial costs, a commercial cleaning business will quickly prove profitable if appropriately managed.
When considering what services to offer as a commercial cleaning business, you want to consider what will generate the most profits for your cleaning business. If you plan to offer your services to local office buildings, you will need to determine what will be included in your services. Do your cleaning services include trash removal or cleaning of the office restrooms? By choosing a predetermined set of services to offer, you can better increase the odds that you will be capable of increasing your revenue.
When surveying your commercial cleaning business options, it is crucial to map out all of the factors. How many employees or independent contractors do you plan to employ? This is going to be a major factor in determining how profitable your cleaning business can be. If you plan to hire a team of three employees, you will need to ensure that you calculate all of the costs, including wages and any applicable benefits owed to your employees. For instance, you are starting your commercial cleaning business in San Diego, California. It would help if you estimated the cost of employing one employee as best you can according to average wages in the area. This will help you determine the revenue needed for your cleaning business to maintain profitability.
Calculating the cost of employing one employee is critical in determining how profitable your commercial cleaning business can be. Starting, it is a good idea to have already at least two contracts lined up for your cleaning business. If you plan to pay your employees $13.00 per hour, you can get a clearer view of the possibility of profit for your cleaning business. First, analyze the hours that are necessary to complete your scheduled tasks. If each contract you have scheduled is for two different days of the week for three hours per day, you will need to perform some simple arithmetic to understand the possible profits better. If the three employees perform the jobs as a team, you can calculate the rate per job first.
Say your first contract is with a medium-sized office building whose cleaning services are scheduled twice a week, three hours per visit. You have scheduled the services to be performed on Tuesdays and Thursdays from eight to eleven in the morning. This means you will need three employees for six hours per week each. This totals eighteen hours in wages for one week for the first cleaning contract. If you are paying a wage of $13.00 per hour, you will need to multiply 18 hours of work by $13.00 per hour. This will give you a total of $234 per week in wages for the first contract for your three employees. This means that you will need to ensure there is a surplus of a minimum of $234 per week after deducting any other expenses so that wages can be paid to your employee.
To put this into greater perspective, evaluate the fee for your contract minus weekly expenses to estimate your weekly profit. If the contract pays $1200 per week, and your weekly costs are $725, you will want to calculate the remaining amount after your expenses and wages are paid. To calculate the total, start with your weekly profit of $1200, subtract $725 for your weekly expenses, and subtract $234 for your wages paid to employees. Once you have deducted your weekly expenses and wages, your profit per week for one contract is $241. Theoretically, at this rate, your three-man team can handle six contracts in a week, with each employee working thirty-six hours per week. If you calculate your weekly per contract profit of $241 times six separate contracts, your profit increases to $1,446 per week. If you can duplicate this with two additional teams of six employees, you can triple your weekly profit to $4,338. This is where the profitability of a commercial cleaning business kicks in. With a team of just eighteen employees, you can profit an estimated $17,352 per month and $208,224 per year.
Residential Cleaning Business Profits
Residential cleaning business profits tend not to rival commercial cleaning businesses, but there is still an opportunity for a lot of profit. Residential cleaning businesses have the advantage that they are more likely to reduce their overhead costs. A small residential cleaning business consisting of the owner and one employee or independent contractor can reduce overhead costs and increase profits in many areas. First, a small residential cleaning business is likely not to need large office space since work will be done on-site, and there will be no need for offices or space for multiple employees. For a new residential cleaning business, a small storage space would be sufficient for first starting out. Likely, most jobs will not need any type of specialized equipment. Most residential clients will have their own vacuums to use, and cleaning supplies can be purchased in bulk to help keep costs low.
Residential cleaning businesses are unique in their ability to minimize the costs associated with running the company in order to make the business more profitable overall. The residential cleaning business market size was last measured at $899.9 million U.S. dollars. While that is drastically lower than the market size for commercial cleaning businesses, it is still a lucrative and profitable industry if adequately approached. Overall, residential cleaning businesses collectively earn around 35 billion dollars in one fiscal year. There is room in this industry for a cleaning business with a clear plan to be just as profitable as a comparable commercial cleaning business.
Rates for residential cleaning will differ from those charged for commercial cleaning. Depending on the type of services your company provides, you will want to charge clients either a flat rate or a per hour rate. Residential cleaning will prove most profitable when you can provide quality cleaning quickly. If you and your one employee are trained in speed cleaning, the possibility for profit maximization is endless. Let us take, for example, a standard 7 day week in which 5 days are designated as workdays. If you charge a flat fee per job, you can help maximize earnings by finishing as quickly as possible to allow room for more clients.
An excellent idea for a residential cleaning business that is just beginning is to establish clientele. Just because you are not operating a commercial cleaning business does not mean you cannot build clientele. Building clientele will be the key factor in determining whether your residential cleaning business is profitable. If you have established clients, you can tailor a schedule that will allow you to increase efficiency by scheduling your cleaning jobs for maximum time usage. If you and your employee can each complete three $100 assignments per day within six hours, you can calculate your estimated profit per week. If you are planning to pay your employee $25 per hour, you will want to take that amount and multiply it by six hours per day and then multiply that number by five days per week to determine your weekly cost in wages per week. Your weekly price for wages will be $750 per week.
If your weekly expenses have been minimized significantly due to no building lease and only one employee, you can estimate your weekly overhead costs to be $450 per week. To calculate your revenue, first, calculate your weekly earnings by multiplying $100 per cleaning job by three cleaning jobs per day. Then, multiply the resulting number by two to account for you and your employee. This will net your cleaning business $600 per day and $3,000 per week. If you take that weekly amount of $3,450, subtract your weekly overhead costs of $450, and subtract your weekly wages of $750 per week, you can calculate your weekly revenue. This will leave you a net income of $1,800 per week and $7,200 per month. If a full six-hour per day schedule is maintained for an entire year, annual earnings would equal a yearly profit amount of $86,400. While it may not be possible for you to work every day for six hours a day, this at least maps out for you how simple it is for your residential cleaning business to be profitable.
Join Our Facebook CommunityJoin Facebook Group
Niche Cleaning Business Profits
Choosing a cleaning niche is a third way to maximize your profits and make your cleaning business more profitable. A niche is a specialized market that you can choose for your cleaning business. Selecting a niche has many benefits, but one of the key benefits is the opportunity to earn a large amount of revenue. Choosing a niche often means that there are standard prices within that niche, especially since it is a specialized cleaning service that everyone does not offer.
Window cleaning services are one example of a niche you can choose for your cleaning business. Many cleaning businesses that offer residential cleaning services do not offer window cleaning services within their packages. If you choose window cleaning services as your niche, you will gain customers from those whose services do not include window cleaning services. Window cleaning services can be offered per hour or at a flat rate for a set amount of windows. This is again an opportunity to maximize profits by completing jobs quickly and efficiently to allow room for more jobs to be completed per day.
A carpet cleaning business is another niche you can choose for your cleaning business. A carpet cleaning business is an excellent choice for a niche due to the capability of completing multiple jobs with just one or two individuals. If you can invest in the carpet steamer and materials needed, this can be an excellent starting point for your cleaning business. Revenue for carpet and upholstery cleaning services was last estimated at 4.9 million U.S. dollars. Since this is a specialty cleaning service, it is one that consumers are likely to pay higher fees for. If you can establish your brand within your local community and build a reputation, there is an opportunity within this niche for immeasurable profit.
In addition to window cleaning services and a carpet cleaning business, a car detailing business is a third cleaning business niche that provides an opportunity for maximized profits. Car detailing is a service that can be supplied while mobile. As an individual, you can go directly to clients to detail their cars. Offering this type of personal service will allow you to charge a higher rate for your services, thereby creating increased profits. You can set flat rates for your services by specializing in car detailing or include tiered packages for detailing options. You may even have options for clients to book scheduled weekly or bi-weekly cleanings. With a car detailing service, it is unlikely that you will need an additional employee unless you plan to use an independent contractor who goes on jobs separately from you. This means no cost for wages, and everything earned that does not go towards the costs of the business will be retained as profit.
Overall, a cleaning business has the propensity to be profitable. Whether or not it will be profitable depends on the type of services offered, the number of employees, and how much is being charged per job. Commercial cleaning businesses generate the highest revenue and can prove to be immensely profitable with a team of only eighteen employees. Similarly, residential cleaning businesses generate a great deal of income and can prove fruitful with just a single additional employee. Within the cleaning business, there are also niches that you can choose from. Offering specialty cleaning services lends somewhat to exclusivity and allows for higher fees to be billed for services. If appropriately managed, a cleaning business can be profitable even on a small scale. Starting a cleaning business with or without a niche can prove profitable.
To help you get started in the cleaning industry, check out these helpful blog posts:
- How to start a cleaning business
- How profitable is a cleaning business
- Cleaning business marketing ideas
- Best cleaning business names
- Cleaning business insurance
- Cleaning business license
- Finding employees for cleaning business
- How much should I pay my cleaning employees
- How much should i charge for cleaning a house
- Cleaning business software