Data provided here comes from our team of experts who have been working on business plan for a cleaning company. Furthermore, an industry specialist has reviewed and approved the final article.
How profitable is a cleaning company, and what is the average monthly income for cleaning service providers?Let's check together.
Revenue metrics of a cleaning company
How does a cleaning company makes money?
A cleaning company makes money by providing cleaning services for a fee.
How do cleaning companyes usually package their offers?
cleaning companyes typically package their offers by providing a range of cleaning services bundled into different packages or plans to meet various customer needs.
These packages are often designed to simplify the decision-making process for clients by offering a clear set of services at different price points. The packages commonly include a combination of essential cleaning tasks such as dusting, vacuuming, mopping, bathroom sanitization, and kitchen cleaning.
Businesses may categorize these packages based on factors like the size of the space (e.g., small, medium, large), the frequency of cleaning (e.g., weekly, bi-weekly, monthly), and the specific areas of focus (e.g., deep cleaning, move-in/move-out cleaning).
Additionally, cleaning companies might offer customizable options where customers can add extra services like window cleaning, carpet cleaning, or specialized treatments for an additional fee. The goal is to provide flexibility and choice while ensuring that customers have a clear understanding of what each package entails, making it easier for them to choose the one that best suits their preferences and budget.
What about the prices?
A cleaning company offers a range of services at various prices based on the type and scale of the task.
Basic residential cleaning, which includes tasks like dusting, vacuuming, and bathroom cleaning, can cost around $80 to $150 per visit, depending on the size of the home. For more extensive services such as deep cleaning, move-in/move-out cleaning, or post-construction cleaning, prices might range from $150 to $300 or more.
Commercial cleaning for offices or small businesses may begin at $100 to $200 per session, while larger spaces might cost $300 to $500 or higher.
Specialized services like carpet cleaning could cost between $100 and $200 per room. Window cleaning might be priced at $5 to $15 per window, depending on size and accessibility.
| Service Type | Price Range ($) |
|---|---|
| Basic Residential Cleaning | $80 - $150 |
| Deep Cleaning | $150 - $300+ |
| Move-In/Move-Out Cleaning | $150 - $300+ |
| Post-Construction Cleaning | $150 - $300+ |
| Commercial Cleaning (Small) | $100 - $200 |
| Commercial Cleaning (Large) | $300 - $500+ |
| Carpet Cleaning (Per Room) | $100 - $200 |
| Window Cleaning (Per Window) | $5 - $15 |
What else can a cleaning company sell?
In addition to regular cleaning services, cleaning companies can also enhance their revenue by:
- Offering specialized cleaning workshops or training sessions
- Allowing therapists or experts to use their space for consultations
- Helping clients with organizing and decluttering their living spaces
- Organizing themed cleaning challenges or home makeover competitions
- Renting out their cleaning expertise for events or filming
- Teaming up with local businesses for exclusive cleaning service deals
- Offering online tutorials and virtual consultations for cleaning techniques
Who are the customers of a cleaning company?
A cleaning company typically serves a variety of customer types, ranging from residential to commercial customers.
Which segments?
We've been working on many business plans for this sector. Here are the usual customer categories.
| Customer Segment | Description | Preferences | How to Find Them |
|---|---|---|---|
| Residential | Individual homeowners or renters | Flexible scheduling, eco-friendly products | Local advertising, social media, neighborhood events |
| Commercial | Businesses, offices, retail spaces | Regular cleaning contracts, after-hours services | Networking events, B2B partnerships, online directories |
| Real Estate | Realtors, property managers | Move-in/move-out cleaning, fast turnaround | Real estate agencies, property management associations |
| Event Cleanup | Event organizers, venues | Post-event cleaning, specialized services | Event planning forums, venue partnerships |
| Specialized | Medical facilities, construction sites | Strict hygiene standards, heavy-duty cleaning | Industry-specific expos, trade associations |
How much they spend?
In our comprehensive analysis for a standard cleaning company, we find that clients usually spend between $100 to $300 per month on cleaning services. These costs are subject to variations based on the frequency, type of cleaning required, and whether they request any special services or add-ons.
Client contracts in the cleaning industry tend to have a duration from 6 to 24 months, depending on various factors such as client satisfaction, consistency of service, and changes in the client's living or financial circumstances.
Considering these factors, the estimated lifetime value of an average cleaning company client would be from $600 (6x100) to $7,200 (24x300). This calculation takes into account both short-term contracts (possibly initiated for trial purposes or due to temporary needs) and long-term commitments often observed in commercial or satisfied residential clients.
With this range, it is reasonable to conclude that a typical client could generate around $3,900 in revenue for a cleaning company, striking a median between the lower and upper ends of the customer value spectrum.
(Disclaimer: the figures mentioned above are general estimates and may not precisely reflect the specific financial dynamics of your individual business.)
Which type(s) of customer(s) to target?
It's something to have in mind when you're writing the business plan for your cleaning company.
The most profitable customers for a cleaning company are typically affluent homeowners and businesses in urban or suburban areas.
They tend to be the most profitable because they have larger properties or spaces that require regular cleaning services and are willing to pay a premium for convenience and quality.
To target and attract them, the cleaning company should invest in targeted marketing efforts, such as online advertising, social media promotions, and partnerships with local real estate agents or property management companies. Offering customizable cleaning packages and eco-friendly cleaning options can also be appealing to this demographic.
To retain these customers, excellent customer service and consistent quality are essential, including timely and thorough cleanings, flexible scheduling, and loyalty rewards programs. Regular communication to address their specific needs and concerns will help build long-term relationships, ultimately ensuring their continued business and positive referrals.
What is the average revenue of a cleaning company?
The average monthly revenue for a cleaning company can range significantly, typically falling between $3,000 and $100,000. This variance is due to several factors including the scale of operations, number of clients, services offered, and geographical location. Here's how the revenue spectrum breaks down across different types of cleaning businesses.
You can also use various assumptions to estimate potential revenue specific to your situation with a financial plan for a cleaning company.
Case 1: A small local cleaning service
Average monthly revenue: $3,000
This type of cleaning service is typically a home-based business or a small team that caters to a limited local area. Such companies often provide basic cleaning services to homes and small businesses and may not offer specialized cleaning or operate beyond regular working hours.
With lower overhead costs, these businesses tend to charge less. Assuming an average of $30 per hour for cleaning services and a total of 100 hours worked each month, the revenue for this type of company would be around $3,000 monthly.
Case 2: An established cleaning company serving a wider region
Average monthly revenue: $30,000
This cleaning company likely operates in a larger urban or metropolitan area, with a dedicated headquarters, and offers its services to a wide range of clients, including larger commercial businesses, retail spaces, and educational institutions. The company may provide more specialized services like deep cleaning, sanitization, or industrial cleaning.
Such a company could charge on average $60 per cleaning hour due to its broader range of services, expertise, and higher operating costs. With an expanded clientele, the company might clock approximately 500 hours of cleaning services a month. Therefore, this mid-tier company could generate around $30,000 in revenue each month.
Case 3: A large-scale cleaning enterprise with comprehensive services
Average monthly revenue: $100,000
At the high end of the spectrum is a large-scale cleaning enterprise, possibly operating across multiple cities or even states. This company would offer a comprehensive range of services, including specialized or industrial-scale cleaning, and potentially operate 24/7 to service large businesses, hospitals, and academic institutions.
Due to the scale, reputation, and scope of services offered, this company could command higher rates, potentially averaging $100 per cleaning hour. If they provide around 1,000 hours of service throughout the month, the enterprise-level company would bring in an average monthly revenue of $100,000.
It's important to note that these figures are general estimates and actual revenues can vary based on numerous factors including the economic climate, competition, client retention rates, and operational efficiency.
The profitability metrics of a cleaning company
What are the expenses of a cleaning company?
Expenses for a cleaning company encompass purchasing cleaning supplies, compensating staff wages, investing in marketing, and covering administrative costs.
| Category | Examples of Expenses | Average Monthly Cost (Range in $) | Tips to Reduce Expenses |
|---|---|---|---|
| Labor Costs | Wages and salaries for cleaners | $2,000 - $5,000 | Hire part-time or contract workers, use efficient scheduling |
| Supplies and Equipment | Cleaning products, equipment maintenance | $500 - $1,500 | Buy supplies in bulk, maintain equipment regularly |
| Rent or Lease | Office space, storage | $1,000 - $3,000 | Consider a home office, negotiate lease terms |
| Utilities | Electricity, water, gas, internet | $200 - $500 | Invest in energy-efficient appliances, shop for better deals |
| Insurance | Liability, workers' compensation | $100 - $300 | Shop around for insurance providers, maintain safety protocols |
| Advertising and Marketing | Online ads, flyers, website maintenance | $300 - $800 | Focus on digital marketing, use social media effectively |
| Transportation | Fuel, vehicle maintenance | $300 - $700 | Optimize routes, consider fuel-efficient vehicles |
| Taxes and Permits | Income tax, business licenses | $200 - $500 | Consult a tax professional, stay compliant with regulations |
| Employee Benefits | Health insurance, retirement plans | $500 - $1,200 | Offer cost-effective benefit options, consider part-time staff |
| Office Supplies | Paper, pens, computer software | $100 - $300 | Buy in bulk, use open-source software |
| Accounting and Legal | Bookkeeping, legal fees | $200 - $500 | Use accounting software, consult an attorney as needed |
| Miscellaneous | Travel expenses, training | $100 - $300 | Cut unnecessary expenses, invest in employee training |
| Emergency Fund | Unforeseen expenses | $200 - $500 | Set aside a portion of profits as a buffer |
When is a a cleaning company profitable?
The breakevenpoint
A cleaning company becomes profitable when its total revenue exceeds its total fixed and variable costs.
In simpler terms, it starts making a profit when the money it earns from cleaning services surpasses the expenses it incurs for supplies, equipment, transportation, salaries, and other operating costs.
This means that the cleaning company has reached a point where it not only covers all its expenses but also starts generating income; this is known as the breakeven point.
Consider an example of a cleaning company where the monthly fixed costs, including business licenses, insurance, office rent, and utilities, typically amount to approximately $10,000. The variable costs, mainly consisting of cleaning supplies, staff wages, and fuel for transportation, could add another $5,000, depending on the number of clients and services provided.
A rough estimate for the breakeven point of a cleaning company would then be around $15,000 (since it's the total fixed and variable costs to cover), or serving between 150 and 300 clients monthly, considering the company charges an average of $50 to $100 for each service.
It's important to understand that this indicator can vary widely depending on factors such as the company's operational efficiency, the number of clients, the range of services provided, operational costs, and competition. A large cleaning company with numerous employees would obviously have a higher breakeven point than a small one-man operation that doesn’t need much revenue to cover expenses.
Curious about the profitability of your cleaning business? Try out our user-friendly financial plan crafted for cleaning companies. Simply input your own assumptions, and it will help you calculate the amount you need to earn in order to run a profitable business.
Biggest threats to profitability
The biggest threats to profitability for a cleaning company can include rising operating costs, such as increased expenses for cleaning supplies and labor wages, which can squeeze profit margins.
Competition within the industry can lead to price wars and lower prices, reducing profitability.
Additionally, economic downturns can result in businesses and homeowners cutting back on cleaning services, leading to a decrease in demand.
High employee turnover can increase recruitment and training costs, while poor customer satisfaction or negative reviews can harm the company's reputation and lead to a loss of clients.
Finally, unforeseen events like natural disasters or public health crises can disrupt operations and strain resources, impacting profitability.
These threats are often included in the SWOT analysis for a cleaning company.
What are the margins of a cleaning company?
Gross margins and net margins are financial metrics used to gauge the profitability of a cleaning company.
The gross margin reflects the difference between the revenue derived from cleaning services and the direct costs connected with delivering those services.
Essentially, it's the profit remaining after subtracting the costs directly tied to providing the cleaning services, such as supplies, staff wages, and transportation expenses.
Net margin, conversely, accounts for all the expenditures borne by the cleaning company, including indirect costs like administrative expenses, advertising, office rent, and taxes.
Net margin offers a more comprehensive view of the cleaning company's profitability by factoring in both direct and indirect costs.
Gross margins
Cleaning companies generally have an average gross margin ranging from 30% to 50%.
This implies that if your cleaning company is earning $12,000 per month, your gross profit would be approximately 40% x $12,000 = $4,800.
Let's elucidate this with an example.
Consider a cleaning company servicing 20 locations, with each contract valued at $200. The total revenue would be $4,000.
However, the company incurs costs such as cleaning supplies, transportation, and staff wages.
Assuming these costs total $2,200, the company's gross profit would be $4,000 - $2,200 = $1,800.
In this instance, the gross margin for the cleaning company would be $1,800 / $4,000 = 45%.
Net margins
Cleaning companies generally have an average net margin ranging from 15% to 30%.
In simpler terms, if your cleaning company generates $12,000 per month, your net profit might be around $2,400, representing 20% of the total revenue.
We maintain the same example for consistency.
Let's assume our cleaning company has 20 contracts, each priced at $200, making the total revenue $4,000.
The direct costs, as previously stated, amount to $2,200.
Beyond these, the company faces various indirect costs such as marketing, insurance, accountant fees, taxes, and office rent. Assuming these indirect costs sum up to $1,000.
Subtracting both direct and indirect costs, the cleaning company's net profit would be $4,000 - $2,200 - $1,000 = $800.
In this scenario, the net margin for the cleaning company would be $800 divided by $4,000, equating to 20%.
As a business owner, comprehending that the net margin (in contrast to the gross margin) provides a more accurate depiction of your cleaning company's actual earnings is crucial because it encompasses all costs and expenses involved.
At the end, how much can you make as a cleaning company owner?
Now you understand that the net margin is the indicator to look at to know whether your cleaning company is profitable. Essentially, it tells you how much money remains after all expenses have been covered.
The amount you will make certainly depends on your execution quality and business management skills.
Unsuccessful cleaning company owner
Makes $800 per month
If you start a small cleaning company, perhaps as a sole operator, and make decisions like underpricing your services, neglecting quality assurance, avoiding investment in proper equipment, and not diversifying your service offerings, your total revenue might not exceed $4,000 a month.
Furthermore, if you don't keep a tight rein on expenses, including supplies, transportation, and any staff wages, your net margin could be below 20%.
Simply put, this scenario would see you earning just $800 per month (20% of $4,000). This is a less-than-ideal situation for a cleaning company owner, limiting the potential for growth or personal income.
Average cleaning company owner
Makes $6,000 per month
Let's say you establish a standard cleaning company with reliable equipment and a small team of staff. You offer a range of services, from residential cleaning to commercial contracts, and perhaps even seasonal deep-cleaning specials.
Your business is running decently. With consistent service and moderate marketing, your total revenue could climb to around $25,000 a month.
By managing your expenses, which now include higher payroll, better equipment, and insurance costs, you could maintain a net margin of around 24%.
Under these circumstances, your monthly take-home would be about $6,000 (24% of $25,000).
Exceptional cleaning company owner
Makes $35,000 per month
You are dedicated to your business and strive for excellence in every aspect. This means investing in high-quality supplies and equipment, comprehensive training for your staff, and a strong marketing strategy. Your company offers a wide spectrum of services, including specialized cleaning for medical facilities, schools, or industrial sites.
With your commitment to exceptional service and client satisfaction, your total revenue could soar to $100,000 a month or even higher.
Moreover, your adept management and operational efficiencies, perhaps through bulk purchasing discounts or favorable insurance rates, allow you to achieve a net margin of around 35%.
In this optimal scenario, your monthly earnings would be an impressive $35,000 (35% of $100,000).
Your aspirations and solid business plan are the foundation of this success as an exemplary cleaning company owner, and we hope this becomes your reality!