Commercial cleaning yields a high salary of approximately $100,000 per year. However, many things can factor into the yearly income of your cleaning business, whether it is a commercial cleaning service or a residential cleaning service. But which one is more profitable if your cleaning service is based in Florida?
In general, commercial cleaning is more profitable than residential cleaning in Florida. However, several things will factor into determining which is more profitable in the state of Florida, such as:
- What are your startup costs?
- What is your potential customer base?
- What is your potential revenue?
- What are your operating expenses?
- Will you need to pay state or federal taxes?
What Are Your Startup Costs?
To start a commercial or a residential cleaning business in the state of Florida, ClpBusiness Boss states that you are going to have to follow a few simple steps. You are going to have to come up with a good business plan and then register your business. Next, you will need to purchase insurance and get bonded. Getting all of the necessary equipment and supplies you are going to need is next on the list. Finally, you need to market your cleaning service. There is one thing that most of these steps have in common. They are all going to cost you money.
When registering your business with the Department of Revenue in Florida, Cleaning Business Boss states that you will have to obtain a business license. The cost of a business license in the Sunshine State is the same, whether you are starting a commercial cleaning service or a residential cleaning service. Per Business News Daily, there is a $100 fee to file articles of organization. You will also need to check with your county and your city if any additional permits are required.
Equipment and supplies are probably going to be your biggest investment when starting your cleaning business in Florida. However, those initial costs are going to be more expensive when starting a commercial cleaning business, as opposed to a residential cleaning service. Both types of cleaning businesses are going to need mops, brooms, dustpans, sanitizing wipes, cleaning products, trash bags, and rubber gloves.
You will also need a vacuum cleaner h either your residential or commercial cleaning service. However, commercial cleaning businesses usually require commercial-grade equipment such as floor buffers and floor waxers. Marketing expenses are going to be approximately the same for either type of cleaning business.
What Is Your Potential Customer Base?
Your Florida-based residential cleaning service or commercial cleaning business is going to need a customer base to start bringing in revenue. If you own a residential cleaning service, your target customer base is going to be people who live in houses, mobile homes, apartments, or condominiums. You may also choose to clean recreational vehicles, depending on your definition of a residence. Your commercial cleaning business is going to target both large corporations and small businesses.
The Census states that the state of Florida is home to 21,477,737 people. Those people own our rent over nine nine million residences. The state of Florida is also home to 2.5 million small businesses. That’s not even counting Florida’s corporations and nonprofit organizations.
All three of these types of businesses will need good, professional cleaning, and your commercial cleaning service can provide this to your fellow Floridians. Based on the total volume of potential customers, it seems that there are more opportunities to make money in residential cleaning, though commercial cleaning usually includes services that are generally not included in basic residential cleaning.
What Is Your Potential Revenue?
Whether you are starting a residential cleaning service or a commercial cleaning business in Florida, you are going to need to set the rates you are going to charge your customers. When cleaning a residence, the website fitsmallbusiness.com suggests charging either an hourly rate or a flat rate. Commercial cleaning businesses usually charge their clients a square footage rate. The website suggests charging a rate of $30 an hour for your hourly rate or a flat rate of $120 to $150 for a single-family home. A rate of.$0.05 to $0.20 per square foot is the normal rate for cleaning an office building. Generally, smaller office buildings are charged a higher square footage rate than larger office buildings.
Depending on how long it takes you or your employees to clean a residence, there is potentially more income to be made by charging your customers a flat rate. If you charge them a flat rate of $150, but it only takes you 4 hours to clean, you have charged your customer service 5 hours of work, although it only took you four hours. Commercial cleaning services charge by the square foot, although most office buildings are much larger and residential homes. You can also increase your income stream by charging businesses for additional services such as floor buffing, floor waxing; all are heavy-duty carpet cleaning.
What Are Your Operating Expenses?
There are certain expenses associated with owning a cleaning business. This applies to either a commercial cleaning business or a residential cleaning service. As with any small business, your operating expenses are going to be labor expenses, insurance costs, marketing, and advertising expenses, bank fees, ongoing expenses like supplies and equipment maintenance. While they are not nm required by Florida law, any additional licenses or n certifications you obtain for your cleaning business will also fall under the umbrella of operating expenses.
According to the website insurance.com, you are going to need to purchase general liability insurance. If your cleaning business uses an automobile, you will also need to purchase commercial auto insurance. In Florida, every non-construction business employing more than five people is also required to purchase worker’s compensation insurance. As the assets that become a business are usually more expensive than in residence, you should choose a general liability plan with more coverage if you are starting a commercial cleaning business.
Another aspect of your operating expenses is your labor costs. You can initially operate a residential cleaning service on your own, although you will have to hire additional employees as your business grows. The same can be said for cleaning small businesses. However, you are going to have to have at least five employees start cleaning large offices. You can operate more efficiently this way, Baha’i simultaneously assigning employees different tasks.
Will You Need To Pay State or Federal Taxes?
Florida cleaning business startup laws states that residential cleaning services are not required to register for business taxes because they are not taxable. However, the website floridasalestax.com indicates that “.any cleaning services that fall within the definition of nonresidential cleaning service and NAICS code 561720 are subject to sales tax in Florida UNLESS the customer is otherwise exempt.”
Although the state of Florida does not have any state income taxes, you may have to pay federal taxes for your commercial cleaning business. If you find your commercial cleaning service under the category of “taxable,” there is something you can do to counter the taxes you are going to have to pay. Fresh Books says that some of the equipment and supplies you use for your commercial cleaning business can be used as tax deductions.
If your office is based out of your home, you can also claim a portion of your housing expenses, per Fresh Books. Marketing expenses, travel expenses, business and liability insurance, and administrative expenses are also viable tax deductions.
As you can see, there is money to be made in the Sunshine State whether you own a residential cleaning service or a commercial cleaning business. As with owning any business, there are going to be expenses you will not be able to avoid. However, owning and operating a residential cleaning service is the more profitable choice with a 48% average profit margin, per Bizfluent.com. In contrast, a high-profit margin for a commercial cleaning business is 28%, car Cleaning Business Boss.
Frequently Asked Questions
Why does the state of Florida have no income taxes?
Yes, Floridians indeed enjoy the benefit of having no state income tax, which has been abolished since 1855. However, the state must receive funding from somewhere. Smart Asset says that residents of Florida do not have to pay state income taxes, mostly due to their property taxes, which are higher than most of the United States. Corporate Income taxes and sales taxes also play a key role in keeping Florida a state income tax-free state.
What is a good profit margin for a cleaning business?
All businesses want to succeed. One of the most important methods to determine whether your business is successful or not is by your profit margin. A profit margin is defined as the degree to which a business makes money. It is calculated by dividing income by revenue. Cleaning Business Boss states that a good profit margin for a cleaning business will fall anywhere between ten and twenty-eight percent.
Please note that the contents of this blog are for informational and entertainment purposes only and should not be construed as legal advice. Any action taken based on the information provided in this blog is solely at your own risk. Additionally, all images used in this blog are generated under the CC0 license of Creative Commons, which means they are free to use for any purpose without attribution.
About the author. Entrepreneur and Cleaning Business Fan.
Hi! I am Shawn and I am a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online cleaning business resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a cleaning business owner, I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Cleaning Business Boss: I want to help cleaning business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.