Is it Worth Starting a Cleaning Company?
by Simplice Essou, CPA | August 2, 2022
Do you love looking around and seeing everything clean and sparkly? Do you love making a difference in someone’s life by providing them with a clean home? If this is you, then, a cleaning business might be for you.
Startup costs are relatively low and therefore it is relatively easy to get started.
Is a cleaning business profitable?
According to an article published by Cleaning Business Boss, the average one-person cleaning business has revenue between $30,000 and $50,000 per year. The revenue can vary depending on the following:
- whether you offer commercial or residential cleaning
- how much you charge for your services
- whether you have employees or not
- whether you offer specialty services such as green cleaning, COVID cleaning, carpet cleaning
While ZipRecruiter is seeing annual salaries as high as $138,000 and as low as $17,000, the majority of cleaning business owner salaries currently ranges between $27,000 (25th percentile) to $65,000 (75th percentile) with top earners (90th percentile) making $109,500 annually across the United States.
How much can cleaners make?
The average pay rate for a cleaner in the US is $12.58 per hour. The rates vary widely depending on the experience level and the average pay rate of the state. According to Indeed.com, the average rate in Florida is $14.62. So, as a business owner you should be looking at paying at least $14.62 per hour to attract workers. Please keep in mind that the competition for good labor being tight, you may have to pay more than the average pay rate.
How much can a residential cleaning company make?
Let’s look at the following example of a cleaning business that cleans five homes each week, charging a flat rate of $150–$500 per home. The cleaning business could earn $39,000–52,000 in a year before deductions and taxes.
The business can make more if they can charge a higher rate, offer additional services such as carpet cleaning, COVID-19 cleaning protocols, take on more jobs during the day and have more cleaners on the team. The more experienced the team members are, the more the business can charge for residential cleaning services.
Commercial cleaning companies
Commercial cleaning companies often charge per square foot. The national average rate as of 2020 was .11 cents per square foot, according to PriceItHere. So on a 5000-square-foot facility, the commercial cleaning business could earn $550 per visit.
How much profit can a cleaning company make?
Let’s assume a cleaning company charges a flat rate of $250 for a cleaning job. If 60% of that amount covers its labor, overhead, insurance, and cleaning equipment costs, the business’ profit margin is 40%, or $100.
So is a cleaning business profitable? Definitely! The business needs to charge the right rate and offer the right mix of services. To be successful the business owner needs to keep the following important considerations in mind:
- Industry experience
- Identifying the target market
- Determining the service area
- Marketing and branding efforts
- Friendly, professional team
- The right equipment.
Simplice Essou, CPACertification Consultants, Consultants, Essou, Tampa
Florida SBDC at USF
Specialty: Accounting, Business Planning, Financial Management, Startup
Simplice Essou joined the Florida SBDC at University of South Florida in March 2020 as a business consultant, bringing almost two decades of experience in accounting, finance and entrepreneurship. Essou started and managed an international consulting firm in 2008, specializing in advising African government on issues related to small-to-medium-enterprise development. Previously, he has worked for large corporations, including Bank of America, BP-Amoco, General Electric, and Lehman Brothers. These roles gave him a wide breadth of experience, including the ability to handle forecasting, analyze revenue entries, actively communicate account receivable risks, and lead day-to-day analysis and reporting for credit losses. He earned an MBA in finance from the Wharton School at University of Pennsylvania and a bachelor’s in accounting from the University of Southern Mississippi.