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I'm just an ordinary guy that started a few small businesses and ended up making more money than I ever thought possible.
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A ‘Basic’ Cleaning Service Business Plan
May 1, 2013
I am often asked about the need for a business plan.
When you are making decisions about the type and size of business you will have, it is good to start with a simple business plan. Even though you’re not going to go into the bank seeking a loan, you need to have some idea of what your expenses will be.
I am an advocate of ‘cash flowing’ or ‘bootstrapping’ your business: use the start slowly and pay -as-you-go approach! Even so, a certain amount of money is needed to begin the most basic of services. For example you will have: (note- not all of these are ‘upfront’ costs. Grow slowly and add these as necessary)
Legal fees- such as obtaining a business license
Paper goods- such as business cards, letterhead, brochures
Insurance- such as Liability, Bonding, Worker’s Compensation, if you decide to have employees (some states allow a small number of employees before requiring)
Communication equipment- cell phone, home phone with answering machine
Computer and printer
Magnetic car signs
With that simple listing you will have an idea of the amount of capital required. You may already have cash on hand, some cleaning equipment, a computer and printer, a cell phone and home phone with answering machine, etc.
I started cleaning my local chiropractor’s office with the cleaning supplies and vacuum we had at home. After adding a couple more customers, I had some cash and started with the basics: a business license, some business cards and letterhead; using the computer and printer I had at home. You CAN start on a shoe string!
When you have determined what equipment or supplies you will need, and their cost, you will then know your Total Startup Expenses.
The next step is to determine what your startup assets are. That might include:
The amount of cash required and how much of it you have on hand
What inventory or supplies you already have on hand
What financial reserves do you have: is there something you could sell to raise funds, could you borrow from a retirement fund, etc.?
It is important to realize that there is a delay in payment when you perform a janitorial service. For example, if you clean a building during the month of January, submit the bill on the 1st of February, you may not get paid until March. In my business, we submit our invoice at the first of the month being cleaned and usually all of those invoices are paid by the end of that month. Still, I must keep on hand sufficient cash reserves to pay employees and buy equipment and supplies during that 30 day period. The bigger your business gets, the greater your cash reserves must be.
Once again, most start-up cleaning business operations can begin with little upfront money. But, you will need to know what ‘growth’ will cost you. Some people keep their business small with little overhead; others go full time and find a ‘bookkeeper’ a necessity. The bigger your business goals, the more detailed your plan must be.