Owning a commercial cleaning business can be rewarding, flexible, and profitable. Usually, the start-up costs are low, and the demand for services is increasing, so the profit margins can be quite high.
Some commercial cleaning businesses are now making six and seven figures in Australia, and they were created from nothing, just as you’re hoping to do. Let’s learn what you need to know about starting a commercial cleaning company in Sydney.
Figure out What Type of Cleaning Services You Should Offer
It’s often better to start with one or two core services because you can add more as you continue growing. That way, things stay simple, you keep your start-up costs low, and you can refine your processes and systems.
As you expand on the commercial cleaning business from scratch, you can add complementary and additional cleaning service options quickly and easily. It’s best to resist the temptation of being everything for everyone; specialists often charge more.
For most people who start a cleaning service, they begin with a domestic option. Demand is still high, and start-up costs are low. You just need some cleaning supplies and liability insurance, and you’re ready to go.
Since start-up costs are low, there could be more competition. Still, as you continue growing by being the best, you can work with commercial properties and earn even more.
Questions to Ask Yourself
When choosing the services to provide, most business owners focus on these questions:
- What are the requirements for training and licensure?
- How much doeprofessional equipment and cleaning products cost?
- What are you most interested in?
- What’s the demand for that service?
- What’s your lifetime value for a customer?
- What do you want to do each day?
Buy a Franchise or Start a Business?
Deciding whether you should create your own business or buy a cleaning franchise is something you must consider early in the process. There are benefits and drawbacks for each, and it primarily focuses on your situation and personal preferences. Here are just some of the pros and cons of each:
- Ongoing advice and help
- Marketing support
- Proven business model
- Established brand name
- Success is linked to head-office success, so if the parent company gets bad feedback, you may, as well
- Restricted growth because of advertising restrictions, fewer services, and a small territory
- Ongoing fees (including annual ones)
- Upfront investment required
Start Your Own Advantages:
- Easier to sell your business later
- No ongoing royalties or costs to pay
- Retain all the profits
- Low start-up costs
- Complete flexibility and control
Start Your Own Disadvantages:
- No established brand
- Must learn by making mistakes
- You’re on your own
The Essentials (Insurance, Tax, Registration, Training, Licensure)
It’s crucial to get set up correctly from the beginning, so you must think of your business structure, registration, licensure, tax, and insurance. Though it might be overwhelming initially, it can be easy to do this. Just choose a simpler structure to do everything fast with minimal costs.
However, you may want to consider getting legal advice from a separate legal entity first. That way, you know that everything is done properly, and there are no issues.
Business Structure and Registration
Before you can start your business, you must determine whether to register as a trust, partnership, sole trader, or company and get an Australian Business Number. It’s best to talk to your solicitor or accountant about the right option for you. However, here are a few of the factors to consider about each one:
As a sole trader, your company isn’t treated as a separate legal entity. That means you can declare your cleaning income after other business expenses are deducted, along with the income from other sources. This all goes on the tax return, and you pay similar tax as individuals.
When you choose to start a business with another person, you’re in a partnership. It’s similar to the sole trader option, except you all equally share the losses, risks, and profits as set out in the partnership contract.
A company is treated primarily as a separate entity. Therefore, you incur additional costs to set it up and require record-keeping and ongoing reporting. Company taxes are different, as well.
The Process for Getting Started
Most people begin as a sole trader because it’s cheaper, easier, and faster. Then, they change to company status when they are more established.
The process is:
- Apply for the ABN (this is free and can be done online)
- Register your business name (unless you want to use your own name). Costs are $34 for a single year.
- Set up your business bank account (you can use a personal one if trading under your own name)
Though it’s often not required, you should create a business plan. That way, you know what cleaning services to offer and have processes in place as you start getting commercial clients.
Register for GST Immediately?
Many commercial cleaning companies register for GST, but if you do this when you start the business, you can claim 10 percent of the cost on many of the services and goods you buy. Still, it means that you’re adding 10 percent to the top of the costs for the services you offer.
GST-registered companies must complete monthly or quarterly business activity statements. Therefore, if you don’t expect to make $75,000 in the first year, it might be wise to wait to register for the GST.
Local Council Regulations and State Licenses
Most cleaning types aren’t regulated in Australia, so there aren’t any qualification requirements. However, you must check with the state licensing body and local councils to see if there are specific things to be aware of, such as health regulations.
Though you aren’t required to go through training, it’s worth completing a course before you enter a business to provide cleaning services. This is especially true if you’ve got no experience.
A recognised qualification provides you with the right knowledge, skills, and expertise to handle cleaning jobs efficiently and correctly. Plus, a course teaches you about the right products and equipment and how to be a professional cleaner. These qualifications may also help you stand apart from the competition.
As a cleaning company, it’s wise to take out public and general liability insurance with a $5 million minimum. Some clients require $15 million. This helps to cover damage and accidents that happen when working at the client’s property.
With that, you want workers’ compensation insurance when you start hiring others.
There are other types of business insurance available, such as:
- Business interruption insurance
- Business vehicle insurance
- Income protection insurance
Talk to a solicitor to determine what insurance requirements are necessary for your business.
Tax and Business Records
It’s crucial to get an accountant immediately when you start offering cleaning services. They help you set up the business properly and use the right accounting practices.
With that, a good accountant saves you money because they can explain the possible deductions you’re eligible to claim to help reduce taxable income.
You’re required to keep records of receipts and invoices for at least five years, so don’t forget!
When you’ve got a system in place, it’s easy to handle record-keeping and tax. You just have to stay on top of things. If you don’t do this initially, you could spend many hours trying to figure it out later.
Choosing the Equipment and Cleaning Supplies
The equipment needed for a commercial cleaning business depends on what type you launch. For example, a residential cleaning service requires a few basic cleaning supplies. You don’t have to use your personal assets to buy large equipment and all the rest.
Overall, a quality vacuum is probably the most important and expensive item you must invest in. However, you don’t require the biggest model on the market.
Other items can include a mop/bucket, cloths, toilet brush, broom/dustpan, dusters, paper towels, and cleaning solutions. You need things like window cleaner, furniture polish, and all-purpose cleaners. It’s always best to go with environmentally-friendly options.
Don’t be tempted to buy low-quality items to save money. In the long term, you spend more time finishing the job and end up buying more products. With that, you run the risk of damaging the carpets and other items in the building.
How to Stand Apart from the Crowd
When you look in your local area, you may find many competitors out there. The truth is, there are probably many other commercial cleaning services. Therefore, you must stand apart from the crowd to gain new business. Here are a few tips:
Always Go Above and Beyond
When you’re cleaning, make sure to go above and beyond. Few companies offer great customer service. Those who do don’t have to advertise their commercial cleaning business as much for clients to find them. In fact, the clients use word of mouth to tell others.
Make sure that you’re always friendly when you answer the phone. Arrive on time, and use software to keep track of appointments and invoices. You may also offer discounts to repeat customers and send thank-you cards and other personal touches.
Be a Specialist
Clients often choose to go with a specialist when they can. For example, office managers probably want a commercial cleaning company with office experience. That way, they know that the cleaners have the skills and expertise necessary to do the job fast and correctly. These people know that they are required to work when the office is empty and closed.
One way to stand apart from the crowd is to become proficient and well-known for one service. This could be carpet cleaning, office cleaning, or end-of-lease cleaning. Don’t forget about outdoor cleanings, such as windows, pressure washing, and gutters!
Though it’s tempting, you shouldn’t compete on price. Your competitors might be offering huge deals, which leave you with low profits. Don’t make yourself work for nothing. The worst customers are those who haggle over prices.
However, with that said, you should know what other commercial cleaning companies charge for services. That way, you can match those with your commercial cleaning business so that you’re not charging less or over-charging.
Put a value on your service. Proudly tell people what you’re worth. Most people are prepared to pay for quality service, so if you position yourself as the premium brand, you can raise prices and attract better customers.
Still, you should offer package deals and special offers periodically to entice new customers. This can also boost the amount of money clients spend with you.
For example, consider offering an introductory discount, wow the pants off the client, and then they are more willing to pay the full price.
Most people think they know what to do to start a commercial cleaning business and jump right in. However, they often forget about finding businesses or people who want to pay for the service.
Without customers, there is no company. Unfortunately, they don’t magically appear when you open the doors. Still, there are various ways to find clients, and you may need to use trial and error to get the most profitable ones.
If you’re following the above and beyond rule from step five, you’re offering great services. That means others refer their friends, colleagues, and family to you. Most commercial cleaners rely on referrals when they start a cleaning business. Don’t be afraid to offer your existing clients a discount when they refer new clients to you!
Offline Marketing Options
The most effective marketing techniques involve building relationships with other companies and brands that have existing client bases. Property managers and real estate agents are great.
Other forms of marketing include using local community events, putting flyers out (check with local business owners first), and leaflet drops.
You may also add your cleaning business to various directories, though this might not be the best method. Most people go online to search for information.
Online Marketing Options
You can’t ignore the internet when you build a cleaning business. At the bare minimum, you need a professional website. Most people use Google above all else to find cleaning companies in their local areas. Therefore, you must focus on your target market and ensure that yours is visible online.
It might be prudent to look at other businesses and how they’re marketing themselves. That way, you can figure out how to best the competition and be at the top of the Google results page.
Employ Staff and Systemise the Business
When you start a cleaning business, you must go into it with a goal of getting yourself out of it quickly. Small business owners often have to do most of the grunt work themselves or hire family and friends to help.
Doing it alone means a limited income because you can only work so many hours a day. If you’re sick, you lose money, and holidays are often impossible.
Therefore, you want to create a business that lets you have a luxury lifestyle and must work on the business instead of in it.
Create a process for everything you do right now. These systems can be handed to someone else and are easily followed. When you’ve got a detailed process, it reduces training costs and time and ensures quality.
As you start taking on more help, you can choose to employ staff or hire sub-contractors. There are benefits and drawbacks of both.
Initially, you might use sub-contractors because they’re already trained, have the equipment, are available immediately, and can be there as needed. However, you might find it hard to manage quality because they’re not loyal to you and could even be more expensive than a staff member.
Then, as you grow and the work is stable, you can hire employees. However, there are various obligations to consider, such as superannuation payments and PAYG tax.
Overall, you must take action! This is the most crucial step. Sure, you must read and learn to start a commercial cleaning company before you jump in. With that, a plan is a great start. When you peruse blogs, you can learn about the mistakes others have made and determine what works best for you before beginning.
However, if you don’t use the information you gain, it doesn’t help you!
About 90 percent of people are likely to read this guide and do nothing. Their dream can never come true.
Are you part of the 10 percent who choose to take action and have your own cleaning business? If so, you are well on your way to starting out and creating a profitable business that can take you to greater heights.
This business can offer you the freedom, flexibility, and income you’ve wanted. Don’t forget that it takes work; you can’t expect to be an overnight success and must still pay your dues and work hard.
However, if you make a commitment now and take that step toward a new journey, it’s well worth it. You can achieve your dreams and goals with the right attitude and work ethic!