- by Gary Clipperton 38-year cleaning industry veteran and President of National Pro Clean.

An office cleaning business, janitorial or carpet cleaning service can be extremely profitable. It can be started part-time as a home-based business and built at your own pace. There are several critical steps you will need to master. Our free advice can help you overcome common start-up and expansion obstacles. 

I.  Overview
 
What Can I Expect?

Commercial cleaning has built-in job security. Each day the same routine repeats in producing a clean facility. In fact, every occupied building in every city has to be cleaned by someone. Why can’t that someone be you? Even though large National and Franchise operations are definite competitors, they only represent 30% of the market. Small, independent janitorial companies account for 70% of the cleaning contractors.

A cleaning service can be started from home, part-time with a fairly small investment. Once you have your own contracts, the income is steady and the profits can be substantial. According to the Bureau of Labor Standards (www.bls.gov/emp/emptab3.htm), janitorial services are one of the fastest growing segments of the commercial market.

A cleaning service can be started from home, part-time with a fairly small investment. Once you have your own contracts, the income is steady and the profits can be substantial. According to the Bureau of Labor Standards (www.bls.gov/emp/emptab3.htm), janitorial services are one of the fastest growing segments of the commercial market.

A cleaning service can be started from home, part-time with a fairly small investment. Once you have your own contracts, the income is steady and the profits can be substantial. According to the Bureau of Labor Standards (www.bls.gov/emp/emptab3.htm), janitorial services are one of the fastest growing segments of the commercial market.

Some contractors set an initial goal of earning over $5,000 a month by the end of their first year. Keep in mind that the first three to six months can be spent in building the business before actual profits are earned. As some would say, “keep your day job” until your income is established.

More businesses are outsourcing their cleaning needs than ever before. 
Cleaning services protect a customer’s assets including floor coverings, rest room fixtures and general equipment. A professional cleaning service meets a valuable need by extending the normal life of a facility and its contents by keeping surfaces clean.

Weighing the Costs

Self employment is not for everyone. You should decide if you have the management and entrepreneurial skills to start and run your own business. Here are a few traits that are required of successful business owners:

• Determination – you will need lots of drive to handle business demands including sales rejection, setbacks and startup obstacles.
• Salesmanship - you need to master the art of closing deals. Also, be ready to promote your business everywhere you go.
• Organization - you must plan your work and work your plan. Landing new accounts requires massive action. You must stay focused on your priorities and avoid distractions. 
• Performance – ensuring consistent results on a daily basis. You need a team that is detail oriented and disciplined.
• Astuteness - business skills to accurately weigh the pro’s and con’s affecting every decision. 

If you are investigating the purchase of a cleaning franchise, make sure you can live with the monthly royalty that is deducted from your income. Check and see if you can terminate relations if you become dissatisfied with the franchise control and rules. Check out litigation filed against the franchise and demand a full disclosure.

An alternative to buying a franchise is investing in a comprehensive
Janitorial Startup Program. It is possible to learn from the experts how to avoid the common startup mistakes. A home study course is an excellent alternative.

You will find many tips on starting a business at the website hosted by SCORE (Service Core of Retired Executives) - part of the Small Business Administration - (www.score.org)

Startup Basics

Small cleaning accounts may only require service once or twice a week. Larger buildings normally require nightly service. Most of the cleaning is performed after business hours. It’s best to start with smaller offices which two people can clean in 1-2 hours. Once you are comfortable managing small accounts, you may consider expansion. Simply market, add new accounts and then hire and train more helpers.

The overall routine is not a lot different than cleaning your own home. You empty trash, dust surfaces and wipe spills, dust mop floors, wet mop floors, vacuum carpets, clean rest rooms, refill soap and paper dispensers and clean entrance doors and drinking fountains.

A basic set of janitorial cleaning equipment might include a commercial vacuum costing $200-$350 along with a trash barrel, mop bucket, dust mop, dust wand, scraper and basic cleaning supplies such as all-purpose cleaner, spray bottles, towels, trash bags, bowl cleaner, furniture cleaner, disinfectant and glass cleaner. Your total supply requirements could run under $500 and would allow you to clean up to $3,000 a month in accounts.

A local janitorial supply store can assist you with choosing the correct cleaning products. Many of the large wholesale clubs and home improvement centers also carry cleaning supplies and tools.

Starting small with minimal costs is the safest way to begin. Remember, it can take 3-6 months before you are ready to start turning a noticeable profit. By keeping your day job, holding off on expenditures and conserving cash flow, you can hopefully weather the initial growth challenges. You still need a small nest egg to start your office cleaning service. Here are some general cost projections:

Startup Training Manuals, audio, video, JanBid estimating software, literature and FREE ongoing expert consulting                       $379
Basic set of janitorial equipment and supplies                         $500
Business license and commercial checking account          $70-150
General liability insurance and fidelity bond                   $450-1200
Office supplies (computer and printer?)                       $150-3,000
Monogrammed shirts, business cards, literature              $200-300
Subtotal                                                                    $1749-5529

Optional - accounting software, CPA or Legal Counsel $500-2000

One other great thing about starting your own janitorial service is that you don’t need all the funds up front.  You can purchase a Startup Program to learn all the ropes, get your cards printed, obtain licensing and then start marketing. Once you land a contract, you can purchase insurance, office supplies and cleaning equipment.

As the business grows, it is beneficial to expand your service to include floor and carpet care. These services require additional training and equipment, but can earn double or triple the amount of janitorial services. Carpet cleaning training procedures can be learned online.

Before You Start

You can conduct a market survey to confirm the timing is right to expand a cleaning service into your local community. Simply visit or phone small and medium size businesses in your area. Inquire if each prospect is happy or unhappy with their current janitorial service. Record the responses so you can follow up with the unhappy prospects at a later time. 

A written business plan can help you establish goals, develop a written strategy and identify startup costs. The Chamber of Commerce web site (www.uschamber.com/sb/default) contains many helpful suggestions include details on writing a business plan and the pro’s and con’s of the various business structures.

There are legal and business requirements to meet when starting a business. Your local Chamber of Commerce or Better Business Bureau (www.bbb.org) can advise you of licenses and business requirements for your city. The U.S. Department of Commerce Small Business Administration (www.sba.gov) is a great source to help you establish your business structure and meet accounting, banking and tax guidelines.

You may want to contact an accountant or attorney to assist with the legal and accounting requirements. Most banks require a business license before they will open a commercial account. This could require filing a city, county or state business name registration or DBA (Doing Business As). Some states charge sales tax, others don’t. Some states have special filing requirements and those can be located at (www.taxadmin.org/fta/link/forms.html).

Contract cleaning services is one type of business where it is possible to grow at a steady pace and allow the expanding income to finance new or used equipment as needed. It’s unnecessary to open a fancy office or purchase a brand new van. Learn creative ways to procure your equipment without going into a lot of debt.

Zoning requirements for home-based businesses vary from city to city. Some cities restrict employees from working in the home, or prevent parking of numerous vehicles, or extra traffic. Some cities prohibit storage of hazardous chemicals or posting signs outside your home. Still, there are millions of home-based businesses in the United States.

To excel, you will need professional literature, an impressive bid proposal packet, and a prospecting and marketing program. Customers don’t need to know that you work from home. However, they will be impressed with sharp fliers and attractive business cards. Customers expect a professional answer when they call your phone number. A start up program that packages you with a professional image will give you a competitive advantage. 

Growth

Expansion will require adding employees, sub-contractors or leased employees. If you plan on hiring your own employees, you will need an employer identification number (EIN) obtained from the Internal Revenue Service. They will also provide an information packet on how to start a business, along with all the federal requirements.

There are numerous U.S. Department of Labor employment regulations that must be met. Additionally, OSHA has safety requirements for handling of cleaning chemicals, plus strict laws governing the handling of medical waste (www.osha.gov/SLTC/bloodbornepathogens/index.html).

Most states will require workman’s compensation insurance for all employees. This coverage pays medical bills and wages for full-time employees injured on the job.

Another option is to use independent sub-contractors. However, there are specific IRS guidelines to be met.  Independent contractors must furnish their own insurance and workers comp. Subs would be paid a percentage of the contract (normally starting at 60%).

Many customers will require insurance coverage. General commercial liability pays your customer in the advent you damage their equipment or facility. Each state has different premiums, but generally figure $800 to $1500 a year. You can request free quotes online by visiting U.S. Insurance (www.usinsuranceonline.com/usio/index.php?cat=2&pt=2).

Bonding covers you in the advent one of your workers is convicted of stealing money or merchandise. Most insurance companies specializing in commercial insurance can also write a fidelity bond to cover your staff.

PEO (Professional Employer Organizations) or employee leasing companies provide an important service of assuming employer responsibilities. You recruit, hire, train and supervise your own crews, but the leasing company assumes all employer responsibilities including payment of all payroll taxes. You furnish the payroll details and they compute and issue the checks as if your workers were actually their employees. The state employment agencies and the IRS recognize this service as valid. U.S. Personnel.

Start Up Nation (www.resourcenation.com) has over 100 links to receive free quotes on almost any business service. You can request quotes on bookkeeping services, website design and hosting, E-mail marketing, credit card processing, small business loans, legal services, telemarketing, answering services, mailing services, business insurance, buying a business, payroll services, background checks, workers comp. and employee leasing just to name a few. 

By consulting with an experienced business coach or cleaning mentor, you could avoid costly startup mistakes. Again, the IRS web site has a large list of resources for small businesses. They also have links to each state providing local rules and business regulations.

III.  Bidding

A cleaning proposal would include an annual, renewable contract quoting a monthly fee. It is a serious mistake to offer a bid that is priced below your own cost. Do yourself a favor and master the bidding process before you begin submitting proposals. Whenever you price your service too high, you may lose the contract. If you price too low, you may secure the contract and wish that you hadn’t.

Customers don’t feel obligated to help you construct and price your service fees. They figure if you are a qualified contractor, you will know how to submit an accurate price estimate for all the required services. A bidding formula takes into consideration all of your expenses, the desired net profit and what the market will bear.

Start by estimating how many hours a night it will take to clean the building you are bidding. Next, determine what the going labor rate is for your city. Then, add your labor burden that includes all payroll costs. Next, add all of your anticipated expenses including chemical, equipment and overhead (such as office supplies, phone, insurance, advertising costs, etc.).  Finally, you calculate a fair profit to add to your price. The net profit is amount of income available to you as the owner. 

Since bidding can be a complex task, an accurate and efficient bidding software (http://www.nationalproclean.com/id25.html) provides many advantages. For example, a building survey form should be available to collect and record the cleaning specifications, frequencies and special needs. Most importantly, the cleaning variables must be rated to determine if the cleaning demands will be light, medium or heavy. By scoring at least seven cleaning demands on a sliding scale, accurate production times can be projected for each separate bid.

Another consideration is whether a customer desires a full and complete cleaning each time or whether they would be interested in a partial clean or trash and rest room touch up on given nights. By offering these options, a customer can then pick and choose service levels if they are experiencing severe budget constraints. Using a thorough bid checklist is helpful, especially in identifying customer expectations.

During the building tour, a prospect may observe your appearance, grooming and self-confidence. To make a good first impression, refrain from uneducated questions that could reveal your inexperience. Don’t criticize the current service provider because it could be a family member. Be punctual for all appointments and try to bond with your prospect.

If you are making a tour in response to a Request for Proposal, make sure you have studied the proposal in advance. During the building inspection or bid walk-thru you must identify all the cleaning demands and needs. It helps to evaluate the quality of cleaning currently being provided and note all deficiencies.

Determine if the prospect requires carpet and floor care services. If so, plan to offer these services or locate a sub-contractor who can perform the work for you. It is best to price additional services separate and invoice the customer as the service is performed. 

A bid proposal package should be customized for each prospect. Include information about your company, cleaning experience, management experience, scope of services, a detailed cleaning specification chart, advertising fliers explaining superior advantages, the contract or service agreement and possibly your insurance coverage. Consult with your business coach or mentor to match your bids to each customer.

It is critical to outline and discuss all the cleaning duties with the customer before you start. If you omit certain items, a customer may come back later and claim you are responsible for cleaning certain areas that you were unaware of. Janitorial Success is a comprehensive marketing manual that assists contractors in providing a detailed bid proposal package.

As mentioned previously, it’s beneficial to offer carpet cleaning and floor care services. Many businesses are in need of regular traffic lane maintenance or deep extraction of their carpet. The IICRC (www.iicrc.com) - Institute of Inspection, Cleaning and Restoration Certification - is a non-profit organization that provides training programs and certification of carpet cleaning technicians. Recently they have approved an online carpet cleaning training program from National Pro Clean Corp.

Floor care is another way to expand your service. Customers with tile floors will need them cleaned, buffed and periodically waxed. This technical side of the business can be easy to mess up. Be sure you are trained and equipped before you start offering this service. Normally carpet and floor care services are bid by the square foot. JanBid Estimating Software is a bidding program that calculates all phases of carpet and floor care along with the janitorial price.

IV. Managing your Business

Good management is a key ingredient to business growth. There are things to master such as: time management, proper business image, negotiation skills, managing people, customer service and the list goes on. The more you learn about starting and running a janitorial business, the greater will be your skills in avoiding costly mistakes. In addition, there are home study courses for cleaning contractors that can teach you the ropes. 

Crunching the numbers

Accounting is another important skill for contractors to learn. Regular monitoring of income and expenses will identify trends and profitability. You should develop (or purchase) a system to track productivity for each building, monitor equipment and job costs and all financial trends.

Tracking monthly income and expenses is critical in order to locate over-expenditures. Part of JanBid Software includes recording the cleaning income and expenses. In addition, there are accounting software packages that help with all the details of invoicing and tracking accounts receivable.

A start up company must keep expenses down. Put off temptations to borrow large sums of money or take on unnecessary debts. Each month compile a profit and loss statement from your checkbook to assess the financial health of your business.

There are other areas of business management to learn including: contact management, sales quotas, follow-up of leads and prospect calls, cost projections, customer history, accounts receivable, quality inspections, customer satisfaction surveys and complaint resolutions.

Recruiting and hiring workers

You have probably heard the saying, “Good help is hard to get”. In the office cleaning business, bad help can be a sure way to lose a customer. Finding personnel is difficult, but not impossible. Consult with your business coach or cleaning mentor to explore best sources for workers.

Cleaning contractors should also have a HR (human relations) system to process and manage new workers. Forms and systems can be used to process and track activities such as: employment applications, applicant evaluations, verification of previous employment, employment interview questions, employer hiring liabilities, employee orientation, on-job-training checklist, work orders, daily schedules, time records, employee performance review, employee or sub-contractor checklist, disciplinary action, job descriptions, exit interview and termination forms. These forms are included in the book Janitorial Success.

There are several ways to recruit workers. You can ask employees for names of dependable, hard working people who want work and like to clean. Consider giving bonuses to employees whose referrals are hired. Ask vendors, service people and sales people if they know of anyone who is seeking work as a cleaning technician. Consider posting a job opening on (www.monster.com) or at a local junior college, Bible College or even your own church.

Pre-employment screening is crucial. If you hire a sex offender to clean a daycare center or a drug addict to clean a doctor’s office you could end up in court charged with hiring negligence. A professional management system should include a thorough employment application process with a screening and rating system. Wonderlic (www.wonderlic.com) provides  a pre-employment testing service called Employment Reliability Inventory. It is a short test that predicts with remarkable accuracy the reliability and dependability of a candidate.

Training Programs

A professional training program must quickly assess when a worker needs specialized training. This is often called gap analysis. Compare what the worker can do with what he or she must do. Then, be prepared to fill the gap.

Cleaning Performance Handbook is an excellent manual to train workers how to perform with high quality and at improved productivity rates. Another approach to training is to require workers to view cleaning videos and take a proficiency test.  This will pinpoint their comprehension levels.

Maintaining Quality

Rapid growth poses new challengers. Workers must be trained to perform all required duties. Just because you hire a friend or relative to clean a building does not mean you can give them the keys and turn them loose. It is important to visit each building on a regular basis and check up on things. In order to converse intelligently with a customer, you must know what is going on in their business.

A quality control inspection form is a valuable tool to score the cleaning performance of each worker. One of the best ways to inspect a building is to use a cleaning tasks scorecard. By scoring each task on a scale of 1-10 and then totaling and dividing by the number of items rated, you will find the overall percent. An 80% score is normally tolerable, but if it drops below 70% then expect customer complaints. This rating system can also be used to warrant a pay raise or even to terminate a worker.

Customer Relations

Volumes of books have been written on improving customer service. Customer satisfaction is what keeps long-term cleaning accounts. Always follow up promptly with new customers and on all project work. Make sure they are happy with the work. Follow-up can also lead to additional work and referrals. Keep in mind; if required tasks are slighted and soil builds up, complaints may occur. 

After a series of complaints, with a slow response on your part, expect the customer to look for another service. Some new contractors become upset when a customer complains. As the owner, you must not take it personally. Instead, offer an apology for items that were missed. On the other hand, when you investigate a complaint you may discover that a building employee was working late and made a mess after your crew finished cleaning.

There are numerous things that can happen in a building involving your crews, customer employees and with your boss (the building manager). It helps to have a consultant available that can guide you thru the mine fields of customer service.

Tracking production times

An excellent practice is to track the cleaning time for every job. This will be invaluable information when making future bids. Of importance is to note some of the cleaning variables that made this job easy, average or difficult. It helps to record the production time in thousands of square feet cleaned per hour, the hourly gross and net profit and the price per square foot.