This article was written by our expert who is surveying the industry and constantly updating the business plan for a cleaning company.
If you're starting a cleaning company, understanding the financial benchmarks is essential to build a profitable business.
Revenue potential varies significantly depending on your business model, from solo residential operations generating $30,000-$70,000 annually to established franchises exceeding $585,000 per year. Net profit margins range from 10% to 28%, with specialty services and commercial cleaning commanding higher profitability than standard residential work.
If you want to dig deeper and learn more, you can download our business plan for a cleaning company. Also, before launching, get all the profit, revenue, and cost breakdowns you need for complete clarity with our cleaning company financial forecast.
Cleaning companies can achieve substantial profitability with the right business model and operational efficiency.
The cleaning industry offers varied revenue streams and margin structures, with commercial and specialty services generally outperforming residential cleaning in both gross and net profitability.
| Company Size/Segment | Annual Revenue | Net Margin | Gross Margin | Labor Cost | Overhead | Revenue/Employee |
|---|---|---|---|---|---|---|
| Solo/Small Residential Cleaning | $30,000-$70,000 | 10-15% | 30-50% | 40-60% | 15-20% | $30,000-$70,000 |
| Small Commercial Team | $70,000-$120,000 | 15-20% | 40-55% | 40-60% | 18-22% | $70,000-$120,000 |
| Established Franchise | $585,000+ | 20-25% | 45-60% | 40-60% | 18-25% | $60,000-$110,000 |
| Specialty Services (carpet, window, deep cleaning) | $50,000-$200,000 | 20-28% | 50-65% | 40-55% | 15-22% | $50,000-$100,000 |
| Mid-Sized Cleaning Firm | $194,000 (average) | 15-22% | 40-55% | 40-60% | 18-23% | $70,000-$100,000 |
| Commercial Cleaning (general) | $100,000-$500,000 | 15-20% | 40-55% | 40-60% | 18-24% | $75,000-$110,000 |
| Residential Cleaning (general) | $40,000-$150,000 | 10-15% | 30-50% | 40-60% | 15-20% | $40,000-$80,000 |
What is the current average annual revenue of small, medium, and large cleaning companies?
Cleaning company revenue varies dramatically based on business size, service type, and operational scale.
Solo operators and very small residential cleaning teams typically generate between $30,000 and $70,000 annually, serving 5 to 20 recurring residential clients. These businesses often operate with minimal overhead and rely heavily on the owner's labor to keep costs low.
Small commercial cleaning teams earn between $70,000 and $120,000 per year by managing 5 to 10 commercial contracts. The shift to commercial work increases revenue potential because contracts are larger and more predictable than individual residential clients.
Established cleaning franchises represent the upper tier of the market, generating over $585,000 annually by completing approximately 2,900 jobs per year—averaging about 12 jobs per day. These operations benefit from brand recognition, standardized systems, and economies of scale that allow them to serve more clients efficiently.
The average revenue across all U.S. cleaning businesses sits at roughly $194,000 per year, though this figure includes the full spectrum from solo operators to large franchises, making it more useful as a general benchmark than a target for any specific business model.
What is the typical net profit margin range for cleaning companies by size and specialization?
Net profit margins in the cleaning industry range from 10% to 28%, with specialization and business model playing decisive roles in profitability.
Residential cleaning services typically achieve net profit margins between 10% and 15%. These margins are compressed by higher labor intensity relative to revenue and the challenges of scheduling efficiency with multiple small jobs throughout the day.
Commercial cleaning operations perform better, delivering net margins of 15% to 20%. The improvement comes from larger contracts, more predictable scheduling, and the ability to deploy teams more efficiently across fewer but bigger clients.
Franchises and large established cleaning firms reach net profit margins of 20% to 25%. These businesses leverage brand power, operational systems, and purchasing economies to extract better margins even in competitive markets.
Specialty and technical services—including window cleaning, carpet cleaning, and deep cleaning—command the highest margins at 20% to 28%. Premium pricing for specialized skills and equipment, combined with less price-sensitive customers, drives this superior profitability.
You'll find detailed market insights in our cleaning company business plan, updated every quarter.
What are the gross margins achieved in commercial cleaning compared to residential cleaning?
Commercial cleaning delivers superior gross margins compared to residential services, primarily due to operational scalability and contract structures.
| Cleaning Segment | Gross Margin Range | Key Margin Drivers |
|---|---|---|
| Residential Cleaning | 30-50% | Higher labor intensity per square foot, frequent travel between smaller jobs, variable job sizes that complicate scheduling, and pricing pressure from competition in consumer markets |
| Commercial Cleaning | 40-55% | Larger contracts allow better labor utilization, jobs concentrated in business districts reduce travel time, standardized cleaning protocols improve efficiency, and clients prioritize reliability over price |
| Specialty Services (carpet, window, deep cleaning) | 50-65% | Premium pricing based on specialized equipment and expertise, less frequent service reduces scheduling complexity, customers have urgent needs with limited alternatives, and technical skills create barriers to competition |
| Office Building Cleaning | 42-58% | After-hours access allows uninterrupted work, consistent layouts across floors improve efficiency, long-term contracts provide revenue stability, and bulk purchasing of supplies reduces material costs |
| Retail & Restaurant Cleaning | 38-52% | Daily service requirements provide predictable revenue, specialized sanitation standards justify higher pricing, health code compliance creates customer retention, and off-hours work minimizes disruption |
| Medical Facility Cleaning | 45-60% | Strict infection control protocols command premium rates, specialized training requirements reduce competition, regulatory compliance creates switching costs for clients, and consistent procedures maximize efficiency |
| Post-Construction Cleaning | 48-62% | Project-based pricing with less price sensitivity, one-time intensive service with concentrated labor, specialized equipment and techniques justify premium rates, and contractors prioritize schedule over cost |
What are the main cost categories that affect profitability in cleaning companies?
Labor expenses dominate cleaning company cost structures, typically consuming 40% to 60% of total revenue and representing the single largest expense category.
Cleaning supplies represent a surprisingly modest cost at $2 to $10 per job, translating to just 2% to 5% of revenue for most operations. The consistency and predictability of supply costs makes this one of the easier expenses to manage and forecast.
Transportation and fuel costs vary dramatically based on service area geography, ranging from $5 to $75 per job. Companies serving dense urban markets face lower transportation costs per job, while those covering suburban or rural territories see this expense consume a much larger share of revenue.
Insurance requirements add $40 to $100 per month to fixed costs, covering essential liability and workers' compensation coverage that clients increasingly demand as a condition of service contracts. This represents a non-negotiable cost that scales with business size and risk profile.
Equipment depreciation contributes $1 to $5 per job, encompassing everything from vacuum cleaners and floor buffers to specialized machinery for carpet or window cleaning. While individual job costs are low, the cumulative capital investment in maintaining a modern equipment fleet represents a significant ongoing expense.
Office and administrative expenses range from $500 to $2,000 per month for larger firms, covering software subscriptions, administrative staff, office space, and back-office systems necessary to coordinate operations, manage scheduling, and maintain client relationships at scale.
How much of total revenue is allocated to labor expenses and staff wages in cleaning companies?
Labor expenses consume between 40% and 60% of total revenue in cleaning companies, making workforce management the most critical factor in profitability.
The wide range reflects differences in service type and operational efficiency. Residential cleaning operations typically land at the higher end (50-60% of revenue) because jobs are smaller and teams spend more time traveling between locations, reducing billable hours per employee.
Commercial cleaning companies achieve better labor ratios (40-50% of revenue) by concentrating work in specific buildings or districts, allowing teams to complete more billable work per shift. Large office building contracts particularly benefit from this efficiency, with janitors cleaning multiple floors in a single location.
Specialty services like carpet or window cleaning can operate at the lower end of the labor cost range (40-45% of revenue) because specialized skills command higher billing rates while labor costs remain relatively stable. The premium pricing for technical expertise creates better margins even with similar hourly wage structures.
Managing wage levels, optimizing scheduling efficiency, and minimizing non-billable time between jobs are critical strategies for maintaining healthy margins. Companies that fail to control labor as a percentage of revenue quickly find profitability eroding, regardless of their gross revenue figures.
This is one of the strategies explained in our cleaning company business plan.
What percentage of revenue is typically spent on supplies, equipment, and maintenance?
Cleaning supplies, equipment, and maintenance typically consume 2% to 10% of total revenue, with commercial operations at the lower end and specialty services at the higher end of this range.
Commercial cleaning operations keep supply costs to 2% to 5% of revenue by leveraging bulk purchasing, standardized cleaning protocols, and efficient inventory management. Large contracts allow for predictable consumption patterns and volume discounts from suppliers.
Residential cleaning services experience slightly higher supply costs at 3% to 6% of revenue due to more varied client preferences, smaller purchase quantities, and the need to stock diverse products for different home environments and customer specifications.
Specialty and deep cleaning services face the highest supply and equipment costs at 5% to 10% of revenue. Carpet cleaning chemicals, window cleaning solutions, and specialized equipment maintenance represent significant ongoing expenses that justify the premium pricing these services command.
Equipment depreciation and maintenance adds another layer of cost, with professional-grade vacuum cleaners, floor buffers, carpet extractors, and pressure washing equipment requiring regular servicing and eventual replacement. Companies must budget for both routine maintenance and capital expenditures to avoid service disruptions from equipment failures.
Smart inventory management—buying concentrated cleaning solutions, negotiating supplier contracts, and standardizing products across all jobs—can significantly reduce supply costs as a percentage of revenue and directly improve bottom-line profitability.
What is the average customer retention rate, and how does it influence revenue stability?
Most cleaning companies maintain customer retention rates between 70% and 80% for recurring residential and commercial contracts, creating substantial revenue predictability.
High retention directly correlates with stable, predictable revenue streams and higher customer lifetime value. A recurring residential client generates approximately $3,200 in annual revenue, making retention far more valuable than constantly acquiring new customers at typical acquisition costs of $200 to $500 per client.
Commercial contracts deliver even better retention dynamics, often running for multiple years with annual renewal rates exceeding 80% to 90%. The switching costs for commercial clients—including the disruption of finding and training a new service provider, potential security and access issues, and the risk of service quality problems—create substantial barriers to changing vendors.
Specialty and one-off services experience lower retention rates at 60% to 75% because customers use these services sporadically rather than on a recurring schedule. However, the premium pricing on specialty work can offset the retention disadvantage when properly managed.
Revenue stability improves dramatically as retention increases. A cleaning company with 80% retention can accurately forecast 80% of next year's revenue from existing clients, allowing for better planning, more efficient hiring, and strategic growth investments rather than constantly scrambling to replace churned customers.
How do seasonal fluctuations impact average monthly revenues in the cleaning industry?
Seasonal variations cause average monthly revenue fluctuations of 15% to 20% in highly seasonal cleaning markets, with patterns differing between residential and commercial segments.
Commercial cleaning sees peak revenue during spring and fall months when businesses conduct deep cleans, facilities prepare for seasonal changes, and companies use remaining budget allocations before fiscal year-ends. The summer months typically see minor dips as businesses slow down and offices empty during vacation periods.
Residential cleaning experiences pronounced spikes ahead of major holidays (November-December) and during spring cleaning season (March-May), with summer also performing strongly as homeowners prepare for gatherings and have more discretionary income for home services. Winter months (January-February) typically see the weakest demand as post-holiday budgets tighten.
Specialty services like carpet cleaning and window washing show distinct seasonal patterns, with spring generating the highest demand for both services. Post-construction cleaning follows real estate and building cycles, creating its own unique seasonal rhythm tied to construction activity.
Smart cleaning companies manage seasonality by diversifying service offerings—combining residential and commercial work to balance seasonal swings, offering promotions during slow periods to smooth revenue, and maintaining a flexible workforce that can scale up for peak seasons without excessive fixed costs during slower months.
We cover this exact topic in the cleaning company business plan.
What is the typical revenue per employee, and how does it vary across company sizes?
Revenue per employee varies significantly across cleaning company sizes, ranging from $30,000 for solo operators to $110,000 for established firms with optimized operations.
| Company Size/Type | Revenue Per Employee | Key Efficiency Factors |
|---|---|---|
| Solo Operators | $30,000-$70,000 | All revenue comes from owner's labor, limiting income to billable hours worked. No leverage from additional staff, maximum revenue constrained by personal capacity and available working hours. |
| Small Residential Teams (2-5 employees) | $40,000-$80,000 | Revenue diluted across team members, significant time spent on coordination and travel between homes. Owner divides time between working jobs and managing operations, reducing overall productivity. |
| Small Commercial Teams (2-5 employees) | $70,000-$120,000 | Larger contract values and concentrated locations improve per-employee productivity. Teams can complete more billable work per shift with less downtime, and commercial rates command higher prices. |
| Mid-Sized Cleaning Firms (10-25 employees) | $70,000-$100,000 | Operational inefficiencies from rapid growth, management overhead reduces per-employee revenue. Companies at this size often struggle with scaling systems before achieving full efficiency gains. |
| Established Franchises (25+ employees) | $60,000-$110,000 | Optimized scheduling systems, standardized processes, and territory density maximize billable hours. Brand recognition commands premium pricing, and support staff enable field workers to focus purely on revenue-generating activities. |
| Specialty Service Providers | $50,000-$100,000 | Premium pricing from specialized skills partially offset by lower job volume and equipment-intensive work. Technical expertise allows higher billing rates per hour, but specialized jobs take longer and may require more setup time. |
| Janitorial Services (large commercial) | $75,000-$110,000 | High-density building cleaning with minimal travel time maximizes employee utilization. Night shifts and standardized procedures create consistent productivity, and long-term contracts provide steady work flow. |
What are the industry benchmarks for overhead costs as a percentage of revenue?
Overhead costs typically represent 15% to 25% of revenue in cleaning companies, covering all non-labor, non-direct costs required to run the business.
Smaller companies operate at the lower end of this range (15-20% of revenue) by running lean operations from home offices, using basic scheduling tools, and minimizing administrative staff. These businesses often see the owner handling most administrative tasks, keeping overhead minimal but limiting growth potential.
Mid-sized cleaning companies typically spend 18% to 22% of revenue on overhead as they invest in proper systems, add administrative support, lease commercial office space, and purchase management software to coordinate larger operations. This investment phase is necessary for growth but temporarily reduces profitability.
Franchises and multi-location operators face the highest overhead at 18% to 25% of revenue, including franchise fees, regional office costs, extensive software systems, dedicated sales and support staff, and marketing expenses. However, they benefit from economies of scale that eventually reduce overhead as a percentage of revenue once operations reach sufficient size.
The major overhead expense categories include rent or office space (2-5% of revenue), insurance and bonding (1-3% of revenue), software and technology systems (1-2% of revenue), marketing and lead generation (2-5% of revenue), and administrative salaries (5-10% of revenue for companies large enough to hire dedicated staff).
How do pricing models affect profitability margins in cleaning companies?
Pricing models fundamentally shape profitability by determining revenue predictability, operational efficiency, and customer value perception.
Hourly rate pricing is straightforward for residential clients but creates margin challenges. Customers easily compare hourly rates across competitors, creating price pressure. Revenue becomes unpredictable as job durations vary, and there's no incentive for efficiency—faster cleaning means less revenue, discouraging productivity improvements.
Square-foot pricing works exceptionally well for commercial cleaning because it's scalable and contract-based. This model allows companies to optimize efficiency without penalizing productivity, bid accurately on large contracts, and create predictable revenue forecasts. Commercial clients prefer this transparency, and cleaning companies can improve margins by increasing efficiency without reducing revenue.
Contract and retainer pricing delivers the highest margins and best revenue stability in the commercial cleaning segment. Monthly contracts provide predictable cash flow, long-term client relationships reduce acquisition costs, and companies can optimize scheduling across multiple contracted clients. This model achieves the best balance of profitability and operational efficiency.
One-off and project-based rates generate higher short-term margins, particularly for specialty and deep cleaning services where customers have urgent needs and limited alternatives. However, the lack of recurring revenue creates forecasting challenges and requires constant marketing to maintain revenue levels.
It's a key part of what we outline in the cleaning company business plan.
What is the average EBITDA margin for cleaning companies in competitive markets?
EBITDA margins for cleaning companies operating in competitive markets typically range from 14% to 24%, with performance varying based on market positioning and operational excellence.
Well-managed niche and specialty cleaning firms achieve the upper end of this range at 20% to 24% EBITDA margins. These businesses benefit from specialized expertise that commands premium pricing, lower competition in technical segments, and operational focus that drives efficiency.
Established commercial cleaning companies with strong client relationships and optimized operations typically deliver 16% to 22% EBITDA margins. Their success comes from contract stability, efficient routing and scheduling, and the ability to leverage scale without sacrificing service quality.
Highly competitive, labor-intensive residential segments operate at the lower end with 14% to 18% EBITDA margins. Price competition, smaller average job sizes, and higher customer acquisition costs compress profitability despite reasonable gross margins.
The gap between net profit margin and EBITDA margin reveals the capital intensity of the business. Cleaning companies with significant equipment investments see a wider gap as depreciation reduces net profit but doesn't affect EBITDA, while labor-intensive residential services show margins more closely aligned between EBITDA and net profit.
Companies consistently achieving above-average EBITDA margins share common characteristics: disciplined pricing, efficient scheduling systems, high customer retention, controlled overhead spending, and often a focus on commercial or specialty services rather than competing primarily on price in residential markets.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.
Understanding the financial benchmarks in the cleaning industry is essential for building a sustainable and profitable business.
By focusing on the right pricing models, controlling labor costs, maintaining high customer retention, and choosing the appropriate service segment for your market, you can position your cleaning company for long-term success and above-average profitability.
Sources
- Sharp Sheets - How Profitable is a Cleaning Business
- Dojo Business - Cleaning Business Profit Margins
- WiFi Talents - Cleaning Industry Statistics
- Shopify - Average Customer Retention Rate by Industry
- Connecteam - How Much to Charge for Cleaning Services
- CleanSpace - How Much Money Can a Cleaning Business Make
