Starting a cleaning business: tips for founders
Proper preparation and planning are essential if you want to start a cleaning business. You need a tax number and business registration and the financing, a marketing plan, suitable building cleaners, customers, premises, vehicles, and material to get started successfully.
Starting a cleaning business: the essential requirements
A specific qualification or master’s title is not required to start a cleaning business. Nevertheless, training as a cleaner and relevant professional experience as a building cleaner should be very beneficial. Many cleaning business employees have the idea of starting their own business. The most successful founders in the sector come from the industry. With their professional and personal experience, they have decisive advantages over the competition. Maybe you were employed in such a business and therefore know what you are as good as your previous employer and what you could do better.
However, running your own business requires not only technical, branch-related knowledge but also business knowledge. In the craft sector, calculations are different from those in service companies. The latter, which also includes your future cleaning business, does not have to cope with material expenditure. Instead, they move to a different market with lower entry barriers, so the competition can be greater. The following points are essential for your successful start:
- The orientation of the business
The alignment of your new cleaning business
The business of a cleaning company is actually clear, but there are many unique selling points in practice. You can specialize in various fields of activity. It is not just about serving private and business customers; we will devote ourselves to this point in the next heading. But suppose you decide to clean commercial, industrial, and public buildings and rooms. In that case, it makes a difference whether you clean huge commercial halls and windows at dizzying heights or rather small objects. Depending on the orientation, you may need a different technique, possibly specially trained staff ( e.g., climbers), a different time calculation, and, last but not least, different insurance. Also, in some areas, such as clinics, there are special requirements regarding hygiene standards.
There will always be filth and those who have more money than the will to clean it up themselves.
There are also differences in private households. For example, you should decide whether you should also take over cleaning after an apartment has been liquidated, which may include removing severe odor nuisances. You could also specialize in carpet cleaning or cleaning glass fronts, windows, and facades. There is undoubtedly a large market for this. You have to know this before the foundation. A management consultant would advise you to conduct a systematic market analysis. The questions of interest are:
- How many potential customers are there for individual market segments?
- Is it worth cleaning commercial premises because of the many local businesses?
- Are there any large public clients and/or industrial companies?
- Are there perhaps several large housing estates in your city with wealthy private customers?
- Which of the possible target groups pays the best?
- How is the competition positioned? Are you running into a void or trying to break into a saturated market?
Also, your so-called USP (unique selling proposition), i.e., your unique selling point. There are always areas and services that no one offers yet. If you manage to stand out from the competition, you can be very successful. So you don’t have to reinvent the wheel if you want to start a cleaning business. It is enough that your customers find your offer unique. You could achieve this by combining very different services with an innovative cleaning process or at an unbeatable price. The latter can include discount campaigns.
One point is also important in the market analysis: You need an attractive but cheap location. Attractive means that it is easy to reach for customers and employees and has parking spaces. For a cleaning business, favorable usually means the location in a commercial area. You don’t need an expensive downtown office.
Set up a cleaning business for private households or companies?
This hint was already given in the previous section: Define your customer base. Initially, it was about the purely technical type of cleaning. The topic can be viewed from a broader perspective: private customers commission and pay differently than commercial customers, industrial companies, and public clients. This differentiation into three customer groups may be useful:
- Private customers
- Industrial and commercial customers
- contracting authorities
Private customers also work permanently, but you have to expect a high fluctuation. For this, they often regularly pay by monthly standing order or even on a case-by-case basis. If a payment fails, it’s just a small amount to get over. Industrial and commercial customers place large orders and are generally considered reliable, but can get into economic difficulties. Then, in the worst case, you have to write off large outstanding debts. This does not happen to public clients because, for example, a municipality cannot become insolvent. However, those responsible often delay payments, something all contractors complain about.
You can get into trouble with your liquidity, even if you will definitely get the money at some point. Of course, your clientele also influences your work organization. For large customers, you need a larger workforce and a tighter schedule. Offices and commercial spaces are often cleaned on weekends or at night. The type of clientele and the orders will not least influence your personnel, vehicle/equipment, material, and storage requirements.
Start a cleaning company with credit?
Almost all founders have stomach pains in advance because of financing. Still, you can set up a cleaning business with comparatively little money. You do not need very expensive machines, such as those required by the manufacturing industry. If you start small (which is almost only possible with private customers), maybe two vehicles, two freelancers, a small storage room, some material, and a tiny office will be sufficient. You may be able to do this with some reserves or personal loans from family or friends. Then you don’t have to negotiate with the bank. But there are also subsidized loans from KfW for founders. We’ll help you find the right funding.
To start a business as a building cleaner, you only need a business registration and a tax number. The responsible trade office will then issue your trade license and inform all other relevant bodies about your establishment. There are no other requirements. The building cleaning trade has been license-free since 2004.
You should definitely take out public liability insurance. Some insurers offer a significant discount for founders. Make sure that all of your activities are insured here. There are insurance packages that insure building cleaning, but not the cleaning of glass and windows. So you should research and compare which insurance is right for you and your cleaning business.
You can, of course, place ads online and offline. Still, it can be worthwhile in the beginning if you address the right customers personally. Perhaps you already know some traders personally. Tell them you are going to start a cleaning business. Long-term contracts are attractive if you offer the right conditions. Commercial cleaning relies a lot on recommendation marketing, especially in the start-up phase.
A popular method is to work with property managers. Most buildings with multiple offices have a central property management business that takes care of the building’s upkeep and maintenance. If this administration recommends you, your chances of getting jobs within the building are high. New companies moving into offices in the building usually ask property management or neighboring companies to look for a cleaning business. Excellent service ensures that both parties recommend your cleaning company.
The challenge is clearly the famous foot in the door. So you will have to show perseverance and a thick head, especially in the beginning. However, if you have your first customers under your belt and do a good job, the chances are good that you will be recommended.
Another way to start your own cleaning company: Become a successor
Another option for owning your own cleaning company is to take over or purchase an existing cleaning business. It is best to read through our guide to corporate succession and become a successful successor. One of the advantages of a takeover: You can fall back on regular customers. From day one, you have customers and sales, and thus, almost no start-up phase you have to bridge financially.
Once you have taken over a cleaning business and have “settled in,” you can consider whether it is worth making changes. Maybe you can expand your offer and/or modernize the business model? As a simple example, you can enable your customers to book appointments via the app. This service works well if you count private customers among your customers. How do you come up with other approaches? Stay alert and ask your customers what else they want and what you can improve.
Building cleaning is decried as one of the more boring and less lucrative business ideas. Don’t let that put you off: your cleaning business is what you make of it. It is not for nothing that countless cleaning companies in Germany share the market without endangering each other’s existence. The reason? There will always be filth and those who have more money than the will to clean it up themselves. And so until technology makes the human component unnecessary. But since technology just fails at the edge of the carpet: get on with your broom and get started.