How to start a cleaning business

Launching your own cleaning business in Canada is easier than you think. We’ll walk through what you need to know about putting together a business plan, registering your business and getting insurance. We’ll also give you useful tips on how to spread the word about your new enterprise.

What qualifications do you need to start a cleaning business?

You don’t need to meet any formal educational requirements to work as a cleaner or start your own cleaning business. However, you may need to pass a criminal record check if you’re cleaning in public venues with children or vulnerable people present like a school or senior’s home.

BizPal.ca provides a really convenient tool for determining what permits and licenses your business needs based on where you’re located in Canada.

Choosing the right business structure for your cleaning business

Your business type determines how much tax you’ll pay on the money you make and how personally liable you’ll be for business debts.

Here are your main options.

• Sole proprietorship. You’ll continue to pay income tax and other remittances to the government as an individual. You personally will be held liable for business debts or lawsuits against your business.
• Partnership. This is essentially the same as a sole proprietorship, except profits are shared with your business partner(s). Under a general partnership, each partner is held personally liable. Under Limited Partnerships and Limited Liability Partnerships, only general partners (those who manage the business) are liable, while limited partners (investors) are not.
• Corporation. Here, your business becomes an entity in its own right and your personal finances are separate from your business finances. In addition to filing your own personal tax return, you’ll also file a separate business tax return. Plus, you’ll have to pay yourself a wage from company profits. You can’t be held personally responsible for business debts and will have reporting and management responsibilities.
• Cooperative. Cooperatives are best for groups of people who share similar social or economic needs and want to operate a business democratically. In Canada, all cooperatives must be incorporated, either at the federal or provincial level. Cooperatives can be set up as for-profit, not-for-profit or charitable organizations.

Dive deeper: How to choose the right business structure for your company

Creating a business plan for your cleaning business

Unless you plan to apply for financing, you don’t need to create a business plan for your cleaning business. But doing so could still be helpful. Laying out your plan clearly will allow you to spot potential obstacles to your success or reasons why you might want to reconsider starting a business or explore other options.

A great cleaning business plan should include:

• Company overview. The name of the business and its owners, the business type and its address. Perhaps a short mission statement, explaining your goals for the company.
• Your target market. Who will you market your services to and why? It pays to be as specific as possible. The better you know your audience, the easier it is to market to them.
• Products and services. A full list of what products and services are offered by your business, plus how much you will charge.
• Competitors. Who are your competitors? How does your business differ from theirs? Why is yours better?
• Marketing plan. Are you planning to distribute brochures? Where will you market your business? What is your monthly marketing budget for each marketing platform?
• Financial plan. How much will it cost to launch your business? What are the estimated monthly running costs? What are your monthly sales forecasts? (You should list a minimum viable target amount, an average target amount and stretch targets for long-term growth).

Setting up your cleaning business

Depending on the size of your business, you may not need to get commercial space. You’ll need somewhere to store your cleaning equipment, but for small businesses, this could be stored in your home.

To be successful, you’re going to need to build an online presence. That means setting up a website and getting active on social media. All offline and online spaces for your company should be branded with your business name and logo to convey an polished and professional image.

Setting up a cleaning business will require some money upfront to buy all the equipment you need and pay for marketing. So, you’ll need to think about the best way to get the funds you need.

How much should you charge for cleaning services?

Most cleaners charge by the hour or by the size of the space being cleaned (square footage). This ultimately depends on several key factors:

• The demand for your services
• The regions and cities you’re servicing
• Whether you’re cleaning houses or commercial spaces
• What your competitors are charging

Rates tend to be higher in larger cities than in smaller, less-populated areas. Hourly rates can range from $15-$50 or more, while surface areas rates generally range from $0.01 to $0.40 per square foot.

If you plan to run a cleaning agency with multiple staff, you can usually get away with charging as much as 30% higher than the standard rate for cleaning services to cover overhead costs and administrative fees. You should also look over jobs ahead of time before giving clients a quote to make sure the rate you’re charging reflects the amount of work that needs to be done.

How to market your cleaning business

The number one rule of marketing is to know your audience and put yourself where they are. Domestic cleaning businesses will therefore market themselves differently to commercial cleaning businesses. Here are a few ideas:

• Flyers. If you’re a domestic cleaning business, sending out flyers can be useful. Deliver flyers directly to people’s mailboxes and pin them up in public places where homeowners are likely to see them. Just make sure you have permission first.
• Set up a website. Your website should contain all your business’s important information including the type of services you offer. Ideally, you’ll be able to optimize your website for search terms that your customers will be searching for when looking up local cleaners.
• Use social media. Create social media pages, and post content that your audience wants to consume. It doesn’t necessarily have to be about cleaning. An office cleaning company could post any content about improving your office space or tips for growing a small business. Be prepared to think outside the box.
• Have a referral scheme. Happy customers will be pleased to refer you to their friends, especially when you prompt them to do so. Perhaps you could even introduce an incentivized referral system.

Setting up bank accounts for your cleaning business

Setting up a business bank account is easy — and usually a required first-step for many small businesses. Depending on the bank and business account you require, you can either apply online, in person or over the phone. The process is similar to opening up a regular chequing or savings account, but may require a bit more paperwork — such as business licence or insurance documentation.

Dive deeper: Business banking in Canada

Getting insurance for your cleaning business

Not all insurers offer the same options, but you may find the following types of coverage helpful for your cleaning business:

• Commercial property. Provides coverage for lost, stolen or damaged equipment.
• Personal injury. Helps cover costs associated with recovering from a work-related injury.
• General liability. This protects you and your employees if legal action is brought against your business for damages done to a client’s person or property.
• Lost key coverage. Covers key replacements costs for your and your employees.
• Commercial auto coverage. Get car insurance for vehicles you use for business including supply vans, trucks and regular passenger vehicles.
• Janitorial bonds. Covers damages related to employee theft and bad work performance. In some provinces or territories, you may actually be required to get bonded.

Some insurance providers offer insurance coverage tailored to your business’s specific needs, so it’s possible to get multiple types of coverage in one policy.

Related: Best business loans in Canada