If you own a residential cleaning business, you might be thinking about expanding and becoming a commercial cleaning business too. Constantly providing new services allows you to grow your business and, in turn, bring in new streams of revenue.
If that’s your case, we salute you! It’s always a great idea to think about how you can expand your offerings. That’s what a successful business owner does.
After getting your feet wet in the residential arena, building a commercial cleaning business is often a natural progression for many business owners. Commercial clients often provide more consistent jobs and a way to expand your business in ways that can sometimes be difficult with a residential cleaning business only.
If you are thinking of doing this, though, there are things you need to keep in mind. There are some subtle differences in the two areas, and some more dramatic ones, too.
This post will help you successfully prepare for the transition.
From Residential to Commercial: the differences
There are certainly some similarities with a residential and commercial cleaning business. Some commercial cleaning jobs will look a lot like janitorial services. They will provide basic dusting, vacuuming of floors, cleaning of windows, emptying trash, and cleaning bathrooms.
This is just the tip of the iceberg for commercial cleaning, though.
In general, commercial cleaning will refer to jobs that are much more specialized. This could include cleanup after a building suffers damage from a flood or fire. It could require specialized equipment to handle the cleanup, depending on what is involved.
In this sense, a commercial cleaning business is a lot different than a residential cleaning business. Some of these scenarios won’t ever come up in residential cleaning settings.
That’s why you need to get prepared before offering your services in the commercial market.
These situations will force you to purchase specialized cleaning equipment, gain different skills, and possibly even gain specialized certifications to even be allowed to do the cleaning jobs.
Residential Cleaning to Commercial Cleaning Business: take the leap
Despite the potential major differences between a residential cleaning business and a commercial cleaning business, it could be well worth making the leap.
Taking on this specialized work may be challenging, but it could also result in significantly higher profits.
With commercial cleaning jobs in your repertoire, you could expand your business exponentially.
If you are ready to make that leap and expand to a commercial cleaning business, take these steps before you do so.
1. Register your business
You may not have registered your business if you focused on just residential cleaning in the past, but that won’t be an option if you want to make the transition to commercial cleaning. A commercial cleaning business needs to be fully registered with the appropriate agencies within your state and with the IRS.
Clients will expect to do business with someone that, in their eyes, is serious about the job. And you can prove that to them by having a registered and compliant business.
Each state has slightly different rules when it comes to how you register your business. In most states, you will do this through the office of the Secretary of State. That office will have detailed information about what type of business you can form and what documents you will need to do so.
Forming an official business entity will provide you a lot of protections. You will have protection against potential lawsuits, injuries that occur on the job, or damages. It will also provide you tax benefits such as writing off some of your equipment and other expenses.
The most common type of business entity for a small commercial cleaning business is a Limited Liability Company or LLC. Some of the other business entities may be a better fit for you, though, depending on your situation.
No matter what business entity you’re looking to create, you’ll need to fill out some forms in person or online, provide proof of your identity, and pay a registration fee. You may also need to renew this registration each year.
2. Get licenses and insurances
Business clients will often require the vendors they work with to be certified, hold licenses that allow them to perform their work, and carry insurance. These are all things that will protect them and their business, should something go wrong when you’re performing your job for them. It also protects you.
A commercial cleaning business will need to acquire various licenses and bonds, in addition to insurance. Depending on the type of work you’ll perform, you may need a license to handle certain materials or operate certain equipment. You may need a license to perform commercial work in general.
You may also need to acquire certain bonds to protect your customers in case of damage incurred while you’re on the job.
Again, you should check with the Secretary of State’s office in your state to figure out which licenses and bonds you may need to obtain. Then, follow the instructions for what documents you’ll need to provide to obtain them.
3. Change management and operations
When you expand into a commercial cleaning business, you will probably need to change your operations a bit. As a residential cleaning business, you might have gone it alone or with the help of one or two workers. That most likely won’t cut it for commercial cleaning.
You’ll most likely need to hire additional employees to help you take on the additional projects you get.
Depending on the type of work you’ll be doing, you may need to ensure these new employees have any licenses or certifications to allow them to perform the work or operate the equipment.
Aside from new employees, transitioning to a commercial cleaning business will require you to re-brand your company. Ensure that your company’s name reflects the services you provide (for example, go from Miguel’s house cleaning to Miguel’s cleaning services). Then update all of your marketing and branding efforts to match that change.
This could include setting up a new website or revamping your current one, purchasing new uniforms for your employees, and new signage for your office, if you have one.
From a financial standpoint, managing a commercial cleaning business will be slightly more complicated. You’ll want to make sure you set up a business bank account if you don’t have one already and have a plan in place for managing your finances.
4. Get new supplies and equipment
When you clean a house, you typically need only basic equipment. Dust cloths and washcloths, disinfectants, a mop, and a vacuum cleaner could be more than enough.
A commercial cleaning business usually requires more specialized supplies and equipment. Besides the cleaning supplies for residential, you could need a rotary floor machine, an industrial carpet cleaner, or a floor polisher.
If you’re doing cleanup work, you may need specialized wet vacuums that can handle flooded rooms and industrial fans that could prevent mold growth. All of this new equipment could require you to obtain outside financing.
5. Get clients
Once you have everything in place to complete jobs, it’s time to start getting clients. This will take some marketing, which, luckily today, can be done without too much of a monetary expense.
If you don’t already have social media pages, make sure you set them up. Facebook, Twitter, and Instagram are great ways to connect with potential customers. Best of all, they’re free to set up.
You may consider spending some money on digital advertising on your social media channels to attract attention when you’re starting them up. Make sure to advertise the services you offer, some tips on keeping commercial facilities clean, and other things that would make people interested in hiring you.
Also, never underestimate the power of networking: it can help you get clients too.
Also, make sure you are transparent about your pricing, availability, skillset, and jobs you can do. You’ll need to come up with your rates, too, so that you are prepared to give a potential client a quote if someone requests this.
How to price your services?
You could price it out like a contractor would, considering your overall costs for the job, plus a percentage markup. Or, you could go the route of just charging an hourly rate that would take into account what you’d need to pay your workers, plus a slight markup.
Either way, you should make sure that the rate you’re charging not only pays for the costs you incur but also puts a profit into your pocket.
Are you Ready to Expand your Cleaning Business?
Converting to a commercial cleaning business is a great way to expand your business. Doing so can be a challenging undertaking if you’re a residential cleaning business, but it could be well worth it in the end.
A commercial cleaning business could require additional expenses for marketing, equipment, supplies, and employees. This could require money that you don’t have on hand.
But don’t let that stop you!
One great way to pay for these expenses is to get a business loan with Camino Financial. We work hard every day to live up to our motto of “No Business Left Behind” for each and every one of our small business clients. We do this by providing great loan terms and educational materials for every one of our clients.
Calculate a business loan, and you’ll be well on your way to expanding your commercial cleaning business.