There are many reasons you might decide to start a small cleaning business. It’s likely you have a passion for helping others and making their homes sparkle and shine. You may also have an entrepreneurial spirit that is pushing you to take your talent to the next level. No matter what is driving your desire to start this business, it is going to be important to make money doing it. This is why we outlined below how much your cleaning business will make as well as tips for how to make even more.
A small cleaning business has the potential to make over $100,000 per year when costs are kept low, revenue is consistently increased, and your mindset is in the right spot. While a small cleaning business may initially make closer to $50,000 with a single cleaner, there is always the potential to expand and improve from there.
What Affects Your Profit
According to Investopedia, profit “describes the financial benefit realized when revenue generated from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity in question.”
This means, to determine how much money you will take home as “profit,” you must look closely at what your revenue and costs will look like.
Less Costs, More Profit
Now that we understand the formula of ‘revenue – overall costs = profit,’ we need to look at ways to decrease your overall costs. Most of the time, the less money you are removing from your initial revenue, the more profit you will make. This is not always the case, but we will get to that later.
Here are some factors that could drastically affect your costs:
While some cleaning businesses prefer to use their own cleaning products and materials to make sure they are only using the highest quality supplies, other cleaning businesses save money in this area by using whatever the customer has on hand.
Employees might help you get your job done faster, but they also require payment coming out of your pocket.
Make sure every employee is well worth their cost before deciding to hire another.
Depending on how far your reach is, this may be an important factor for you.
It may be wise to focus on local clients so that you can do multiple cleanings per day rather than spend more time than necessary in a car between one job and another.
While operating within a franchise certainly has its benefits, it also comes with costs.
After careful consideration, you might determine that the costs associated with franchising are not worth it, and it’s better to open your cleaning business on your own.
When More Cost Might Mean More Profit
Focusing only on decreasing your costs is not necessarily the best way to grow your business. Sometimes, spending more means growth in the long run.
A great example of this is when you hire your first employee. By hiring just one additional cleaner, you have doubled your capacity for clients which means you have doubled your capacity for revenue!
Make sure you understand the cost analysis of hiring another person before you sign the papers. While paying one employee may grow your business, paying seven may ruin it.
More Revenue, More Profit
While it is important to understand what your costs will be and work to shrink them appropriately, it is also beneficial to analyze your revenue so you can increase it.
Here are some factors that could drastically affect your revenue:
Offer free estimates
It might seem like a minor suggestion, but a free estimate literally gets you in the doors of your potential customers’ homes.
While you might have many leads that go nowhere and feel like you are wasting time with your estimates and walkthroughs, remember that every client you lock in from this offering is likely worth the cost of many failed attempts.
While you may feel like you are making less money if you offer discounts for more frequent cleanings, this feature encourages your customers to utilize your services more often.
The more you can encourage your current clients to use you, the less you will have to worry about searching for additional clients.
Create a Referral System
Referral systems are great ways to encourage your customers to market for you.
As with some of the other suggestions already listed, it might feel like you are losing money to offer each successful client referral 50% off their next cleaning, but if you lock in a new client for many years to come, this is money well spent.
Upsell Current Customers
Rather than look for new clients, there may be special offers that you can share from time to time for your current customers.
Once your current customers are used to paying their standard fee, an extra $40 service might not seem like much every once in a while. Even if only five customers take advantage of this offer, this is still $200 extra dollars in your pocket for the week or month.
Focus on higher income clients
Higher income earners are often more used to utilizing cleaning services than lower income earners. They may even be used to paying top dollar for this service or not be very concerned about the price.
Use this to your advantage and focus especially on marketing to these customers. It’s likely you can increase your prices without their concern.
Once you are positioned as their premiere cleaner, they will also likely share your name with their high-income friends. This will grow your revenue exponentially.
Why Less Revenue Might Mean Less Profit
I know it sounds ridiculous, but sometimes increasing your income might actually end up having a negative affect on your profit long-term.
“How?” you ask.
Consider a cleaning business that has 20 solid contracts that they have wonderful relationships with. Any of these 20 contracts would be happy to refer additional customers at any time, because they have received nothing but fantastic service. This is a great situation to be in!
Now, consider a cleaning business that has 50 contracts that it cannot keep up with. They may have more money coming into their business (for now), but they are bound to lose customers and disappoint others as they struggle to keep their commitments.
Having 50 clients might seem like the better situation, but if your reputation is going to be ruined by your poor service, this level of income will not be a long-term reality.
Focus on being the best you can be and serving each client with excellence and you are bound to see growth over time.
Pricing Makes All the Difference
There are many ways to price a small cleaning business. The method you choose can affect your revenue and your profit drastically.
Below are some options to consider when deciding how to price your service. Each comes with its own positives and negatives:
- Charge per square foot cleaned
- Charge per number of bedrooms in the house/apartment
- Charge per cleaning package
- Charge per hour
- Charge based on what the customer believes it is worth
- Charge per room cleaned
Recurring vs. One Time Clients
Another factor that will affect your income is whether you focus only on recurring clients or expand your availability to one time needs and move outs.
It may seem beneficial to open up your services to one time needs and move-outs, but if you find yourself spending too much time on trying to find new customers, it may be wiser to focus on establishing solid recurring contracts.
How to Make More Money
While increasing revenue, decreasing costs, and adjusting your pricing are typically fool-proof ways to make money in any business, there is also room for improvement when it comes to your personal mindset and effort.
Below are some ways you can push yourself beyond your standard capacity and bring even more success to your business:
Do not limit yourself to what you believe you can accomplish today. Keep your mind open to succeeding beyond your wildest dreams and you may just surprise yourself.
Spend time watching YouTube videos about successful cleaning businesses or successful businesses in general.
Read business books to increase your knowledge. Pursue growth constantly and you (and your business!) will be rewarded.
Put in the time
Especially in the beginning, your hours worked will literally convert to your dollars earned. You may need to be willing to sacrifice to see the results you hope for.
Work hard and know that you are building a foundation that will last.
Give your all
Beyond simply giving your business your time, give it your all.
Be the kind of person that your clients want to talk about. Go the extra mile consistently and people will pay attention.
How do I upsell to current clients?
An upsell does not have to be a long-term offer. This may look like a special 1-2-month promotion where you offer a service beyond your typical options.
That being said, these additional options could always be present and simply be a standard question or advertisement that is shared with your customers upon payment, during your service, or in a weekly or monthly email update.
The most important factors are that it is an appealing offer to customers and that they are aware it exists.
What are the worst ways to price your cleaning business?
Many cleaners agree that charging per square foot or per bedroom are the least-informed ways of pricing your cleaning services. Simply knowing the square footage or bedroom count of a client’s home does not give you adequate insight into their specific cleaning needs.
Letting the client decide on the pricing can also be extremely risky, although they may end up suggesting a price well-beyond the highest you would have been willing to offer.
Generally, it is best to do a walkthrough of your client’s home and then determine the best estimate from there. This way, you can make the most informed decision possible, which will also hopefully be the best decision for your business possible.
Kenton, Will. “Understanding Profit.” Investopedia. Investopedia, January 29, 2020. https://www.investopedia.com/terms/p/profit.asp.
Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.
Increase your cleaning business’s worth with our free guide, The ABCs of What To Do Before Opening Your Cleaning Business.