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Answering Subscriber’s Questions: ‘What is the best way to start a cleaning business?”

August 1, 2013

 

Newsletter subscribers and some of my book readers are often overwhelmed by the variety of options available to them. Questions arise: “How fast can I grow this business?” Or, “How much money can I make?” So, I am going to start a new feature: taking questions and turning them into short blog posts. In this post I’m going to answer the two above questions.

I always suggest that you start as a small janitorial business. The advantage of this is that you do not need to have a large amount of money as you begin your business, and it will allow you to accumulate cash as you grow. A secret to success in this business is to operate on a debt free basis (Author Dave Ramsey, in his book EntreLeadership, describes building a multi-million dollar company debt free!). Yes, you may grow faster if you borrow money, but, you can ‘crash and burn’ when you don’t have the funds necessary to pay back your lender(s).

One of the benefits to beginning slowly is that a family can build this business together. My wife and I and our teenage children shared in making our contract cleaning business a success, and allowed my children to develop good work habits and skills. When my children were students they were able to work with us part-time as they completed their college classes. Also, it is possible to operate a successful part time contract cleaning service while continuing to hold a full-time day job. Your job continues to pay your day-to-day expenses, while your contract cleaning profits can be reinvested in business growth. As your company grows you will find it necessary to give it more attention. As you do so, and you devote more time to it, you may reach the point where it can be to your full time business.

Once again – Start small: grow your business and gain experience as you do. You’ll always make some mistakes – it’s much easier (and usually less expensive!) to correct smaller ones than bigger ones.

Next: How much money can I make?

One of the benefits of starting your own business is that there is no limit to what you can earn. I have friends that started with one account; built their business to where they were earning $30 – $40,000 a year, and were happy to stop there. I know other individuals that have built their business to 180+ accounts and are now living in million-dollar homes. Some have chosen to stay family owned and operated; others have hired a full-time sales staff, dozens of employees, and have full-time managers to run the businesses for them.

The total dollar volume is not the most important figure. What is important in this business, and in every business, is your profit, and this is directly related to the efficiency of your business efforts. We all know of multi-million-dollar companies that have gone bankrupt. They thought they were making money, but really they were spending more than they made. By building your business slowly you will learn to control expenses such as wages, cost of equipment and supplies, etc.

What kind of rate can you charge your customers? That will vary upon the area of the country in which you live. In most cases you will charge more per hour to clean a small building and less per hour to clean a larger one. Larger accounts, say five days per week, where you are charging a monthly service fee of several thousand dollars usually pay less per hour than a one day or two day per week account that pays $200-$500 per month.

A smaller account must be charged more per hour because:

  • there are greater administrative costs,

  • more supervision of employee costs,

  • and higher bookkeeping costs,

in handling 5 to 10 smaller accounts that bring in the same amount of money as one larger account. Also, there is less travel time and expense going to one large account then there is in going to several smaller accounts. However, by pricing them right, both smaller accounts and larger ones can be profitable.

Once again, you are building your business. Be encouraged and inspired by the potential that is out there, but don’t feel pressured to do what someone else is doing. Make your business the vehicle that it needs to be for your happiness and success in life. 

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