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Rough cost of opening a residential cleaning business in California

Discussion in 'Business & Tax Advice' started by thedon23, Jul 12, 2010.

  1. thedon23

    thedon23 Elite Member

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    I've never owned a business, and just want a rough estimate of how much it would cost to launch a small, residential cleaning business in California.

    A breakdown of costs would be nice.

    Anybody?
     
  2. tygrus

    tygrus Supreme Member

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    About 100 bucks a week. $50 in supplies, $50 in gas and your own time.
     
  3. jesdon2

    jesdon2 Junior Member

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    I can't speak for CA, but I have run a cleaning/maintenance company as well as worked in the industry before and can tell you that the biggest problem is insurance.

    I ran a company like this 7+ years ago in Florida and the liability insurance was insanely high. Mostly due to the risk that is placed on janitorial companies. You have to have enough insurance to cover any potential damage that could be caused, think stained carpet, broken fixtures etc.

    People are always looking for two things, a lawsuit and a way out of paying their bills. You are going to encounter both if you run a janitorial business for any length of time. Commercial janitorial is even worse. I remember working at a shopping mall, not only did I have to have a 50 million dollar liability coverage policy, each vehicle that was brought on mall property had to be covered for 3 million in the event there was any damage caused. I was driving a busted old chevy pickup at the time and it had way more insurance than I did, lol.
     
  4. thedon23

    thedon23 Elite Member

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    Didn't think it could be that cheap. Thanks ;)

    Yeah, I completely agree. I have a good amount of startup money, but the only aspect scaring me is insurance. Especially in the USA; people always look for the smallest thing to sue over.
     
  5. CoyoteAssassin

    CoyoteAssassin Elite Member

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    I have a commercial cleaning company that I started a few years ago (prior to IM). I make more from IM but the cleaning money is guaranteed... whereas IM is not.

    General Liability Insurance I found is not that expensive. It's also good to be bonded and insured but in my state, it is not that much.

    Why residential and not commercial. Personally, I would not consider residential unless I was forced to. Commercial has higher profit margins and you can easily clear $75 - $125 an hour. You just can't do that with residential when the owners are there watching you and adding stuff to your list even if it is a fixed price.

    My estimate is that it will costs you about $300/month. Travel, supplies (unless client provides them as often they do), and insurance. Most likely it is husband and wife unless you have employees and you do not.

    I hope it all goes well with you.
     
  6. thedon23

    thedon23 Elite Member

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    Do you recommend hiring employees? I mean, wouldn't it be smart to begin with an employee or two (since most don't have the money for anymore than that) and work your way up from there?

    To be honest, I don't think I'd be the best guy to be cleaning places :D
     
  7. jesdon2

    jesdon2 Junior Member

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    Yeah. You know, I would do as Coyote mentioned and go with a commercial janitorial over residential. I focused mostly in commercial areas when I was in the business and it really is a lot less headaches.

    I have seen homeowners refuse to pay a bill and go to court because they "found" a single hair in the bathtub after the cleaning crew finished. Griping that the service was not to their standards. It can get really bad.

    However, I don't want to discourage you, just think you might want to look at both sides of the fence before jumping into business.

    The fastest and easiest way to make money in commercial cleaning, is parking lot maintenance. I used to go out to strip centers at 3:00am do my work and be home by 10:00am after cleaning a few properties, the rest of the day is left for running your business, IM or whatever.

    What we used to do is, call up some local parking lot maintenance companies out of the phone book, pretend to be a potential customer and get them to send you their prices. That way you can price yourself competitively.

    Now, go out to the local strip centers in the middle of the day, the more trash blowing around the better. Take a few pictures of the garbage and overall dirty lot. Now find a vacancy, get the property management phone number off of the leasing sign, call them and get the name of the property manager and office address.

    Make a nice little package of the pictures you took, your company brochure that lists all of your services, no prices, and then hand write a nice little note saying that you were on property on such and such date, doing some shopping, and noticed that the property was not being maintained very well, see photos, and just wanted to let them know that you offer some lot maintenance services if they are interested.

    Now rinse and repeat.
     
    • Thanks Thanks x 1
  8. CoyoteAssassin

    CoyoteAssassin Elite Member

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    Yes, you do need to hire employees... but only when you can afford to. Are you currently in the business?

    If you do not know how to clean, learn how. You need to keep your overhead down and that may include you doing some of the cleaning. Consider getting your wife to work for you. Then look to other trusted people that you know. Most likely you have a few friends that could use the extra cash and would be willing to work for you.
     
  9. thedon23

    thedon23 Elite Member

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    Not in the business currently; just something I've been considering.

    As far as commercial cleaning goes, what are the costs of supplies (roughly)? I'm assuming it's more expensive than residential cleaning because there's certain equipment you may need, correct?
     
  10. CoyoteAssassin

    CoyoteAssassin Elite Member

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    You should have have a IM from me. Also, keep in mind, that with any business, outsource things that you do not do the best at. With cleaning, it may be tile, carpet, and window cleaning (for high rise buidlings). You do not have to do it all and buy it all on your won.
     
  11. yuyo

    yuyo Regular Member

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    i wanted to go and open a cleaning biz in florida, but the insurance is to costly.

    Really i don't know what to do anymore.
     
  12. rozer2050

    rozer2050 Newbie

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    I agree with the answers