Professional cleaning service team working with cleaning equipment in room. Cleaning Service. Concept: cleaning business
By: rkapur
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How Much Does It Cost To Run A Cleaning Business?—Breaking Down the Expenses

Everyone wants a clean home, office, car… But most don’t have the time (or patience) to do the cleaning by themselves. That’s why finding customers that need cleaning services isn’t tough. Additionally, there are several popular apps like MyClean and TaskRabbit, that can help you to find customers.

If you want to own a cleaning business, good news! There’s no shortage of demand for this type of service. But the challenge could be to run your business in a manner that allows you to maximize your profits.

In this post, we’ll discuss the expenses involved in running a cleaning business. Which are the big payments that you need to make? How can you shrink them? We’ll also go into the best ways to track your costs and seven ways to minimize them.

Daily Cleaning Equipment. concept: cleaning business

A cleaning business’s expenses: a detailed breakdown

In the cleaning business, competition is fierce. That’s because starting a small cleaning business is relatively easy. Plus, you don’t need much capital. 

Here’s a breakdown of the approximate costs you could incur in if you start a cleaning business.

Operating expenses and cost of equipment

There’s a long list of things that you’ll need for your cleaning business. Here are some of the supplies and equipment that could be required:

  • Trash bags
  • Plastic buckets
  • Rubber gloves
  • Floor cleaning solution
  • A vacuum cleaner
  • Brooms
  • Cleaning rags
  • Dustpans
  • A cleaning supply cart
  • Wipes
  • Mops
  • Dust towels
  • Carpet blower

As you can see, the list is long. Each item may not cost much. But if you add everything up, the total cost can be high. 

You also need to realize that some of the items will be one-time purchases. For example, you’ll need to buy a vacuum cleaner or a carpet blower only once. But the cleaning supplies will need to be replenished regularly. 

ESTIMATED TOTAL COST OF OPERATING EXPENSES AND EQUIPMENT: $1,000

Licenses

Which are the business licenses and permits that you will need? This is a vital issue that you need to address before you start your cleaning business. 

Remember that the requirements could differ from state to state. However, some of the areas that need your attention are:

  • A fire code permit
  • A hazardous materials disclosure
  • A wastewater discharge permit
  • A State EPA identification number

ESTIMATED TOTAL COST OF LICENSES: $500

Insurance costs

This is another major cost that you need to take into consideration. A cleaning business needs various types of insurance cover

It could be essential to buy general liability insurance. This will protect your company if you or an employee causes injury to a client. It also protects you if there is some damage to the client’s property.

While on the subject of insurance, don’t forget about janitorial bonds for your cleaning business.

What’s a janitorial bond? It’s essentially an insurance cover that reimburses your client if one of your employees commits theft. 

ESTIMATED TOTAL COST OF INSURANCE: $1,000

Summary of cleaning business expenses

Operating expenses and cost of equipment $1,000
Licenses $500
Insurance $1,000
TOTAL $2,500

As you can see, it’s possible to start a cleaning business with as little as $2,500. Of course, costs can vary depending on the scale of operations and the number of employees that you have. 

However, it’s a fact that the cleaning business is one of the lowest-cost ventures that you can start.

Financial analyst analyzing business data on desk. top view. Accounting. concept: cleaning business

How much am I making, and how much am I spending?

It’s crucial to track the revenue and expenditure of your cleaning business. Remember that your profit is the difference between how much you earn and the sum you spend.

But how can you increase your profit?

There are two ways in which you can approach this issue.

  • Try and increase the amount that you charge for your services. However, you could face a constraint here. If you charge too much, customers may not hire your business. This is especially true in a situation where competition is high.
  • The other thing you can do is to track your costs carefully. If you can keep your expenses to the minimum, you can boost your profitability. Make it a habit to write down your expenses. 

#CaminoTip
Consider using an expense tracker app, this will simplify the tracking process. Luckily, these online tracking apps don’t cost much. You can subscribe to them for a few dollars a month. Some are free.

When you are calculating how much you’re making and how much you’re spending, there are two critical points that you should keep in mind:

1. The amount of cash that you have with you at any point in time doesn’t necessarily tell you how much profit you’re making.

Let’s understand this in some more detail. Say, you’ve completed a contract and received your payment of $500. The sum you spent on supplies was $100, and you paid a temporary worker another $150. So, the cash that you have generated from the job is $250.

Unfortunately, calculating profit is not as simple as that. You also need to take your other costs into account. For example, insurance payments would be made every year. You will need to set aside cash for expenses of this type. Consequently, your profit would be lower.

2. The other thing that you need to remember is that for small business owners, CASH IS KING.

In practical terms, this means your business should always have some surplus cash. It isn’t enough to carry out high-margin jobs. You must also collect the payments that are due.

Now, let’s come to another critical issue: How can you control your costs?

Increasing piles of dollar bills isolated on white background. concept: cleaning business

How can I cut down on my cleaning business expenses?

Do you want your cleaning business to be more profitable? 

The trick is to lower your expenses as much as you can. Of course, your cost-cutting efforts shouldn’t lead to a drop in the quality of your work. 

So, how can you ensure that you boost your income while keeping costs low?

Here are seven steps you can take to lower costs:

1. Look for the best deals when buying cleaning supplies

Bulk purchases can result in significant savings. But you must have the space to store everything you buy. 

Compare prices on Amazon and sites like CleanItSupply. Even if the price difference at the cheaper website is only slightly lower, you could make significant savings over time. Don’t forget to add shipping costs when making a comparison.

2. Buy tools that work on multiple surfaces

When you are purchasing new equipment, look for machinery that works on more than one type of surface. For example, see if you can find equipment that can clean hard surfaces as well as carpets.

Even if the cost is high, this strategy could save you money. That’s because you’ll be buying one machine instead of two.

3. Hire temporary workers

This can be a good idea, especially if your cleaning business is new. Hire people when you need them. When you get your next job, you can rehire them.

When your cleaning business has a large enough number of regular customers, you can think about employing permanent staff. 

4. Maintain your equipment well

Look after the machinery that you buy. Follow the manufacturer’s instructions. This will ensure that you get an optimum level of performance from your equipment. It will also extend its useful life.

If the machinery is being used by a worker that you have employed, provide an adequate level of training. You don’t want your equipment to break down or require expensive maintenance because it wasn’t handled correctly.

5. Develop a plan for handling situations where a worker doesn’t show up

What will you do if one of your employees doesn’t come to work? Absenteeism could lead to a delay in the completion of the assignment. 

Make it a practice to maintain a list of workers you can call to help you on short notice. If you do this, it will help you to meet your commitments. 

6. Make sure that your workers have the necessary skills and experience

Don’t hire untrained workers. If you do, spend time bringing them up to speed. Remember that on-the-job training is as essential as a classroom session.

7. Try and switch to green chemicals

Explore innovative options in cleaning supplies. Instead of using traditional solutions, opt for green products. Doing this will help you to differentiate yourself from the competition. It could also allow you to save money.

person cleaning bathroom, cleaning service, cleaning business

Be Successful!

Running a cleaning business successfully involves keeping a close watch on your costs. If you can do this, you will be able to boost your profits. This can give you the money you need to expand operations and take your enterprise to the next level.

And when you do have your business up and running, consider investing in it to make it grow more and more, which will translate in more profits.

At Camino Financial, we’ll be happy to help you whenever you need funds for your business. 

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