Have you ever wondered how to start a carpet cleaning business?
Matt Crimi started North Seattle Carpet Cleaning with a $3,000 loan and a course from a janitorial supply company. Now he’s on track to make $108k this year! We’ll show you how to do it too.
If you want to know how to start a carpet cleaning business, keep reading. We’ll walk you through the process with tips on:
Developing the skills to run a carpet cleaning business.
Choosing a name for a carpet cleaning business.
Writing a business plan for a carpet cleaning business.
Registering a carpet cleaning business.
Funding a carpet cleaning business.
Preparing for launch
Operating a carpet cleaning business
Marketing a carpet cleaning business
Step 1: Developing the skills to run a carpet cleaning business
Before starting a carpet cleaning business, you’ll need to develop some skills. When creating a carpet cleaning business, you’ll need to be familiar with the following skills or hire someone who is:
Accounting
Customer Service
Inventory and Equipment Management
Marketing
Technical Skills Required for Carpet Cleaning Businesses
Each of the links will take you to free Udemy classes on the subject matter to help entrepreneurs develop their skills in their personal time.
I know. Learning these skills can be a challenge, so let me answer some common questions.
Is carpet cleaning an excellent business to start?
There are a ton of articles written on the best business to start. Most consider cleaning businesses like North Seattle Carpet Cleaning one of the most accessible types of companies for a new small business owner to start.
Matt told us:
I had an Economics degree and experience doing forestry and wildlife management work. The logistics and equipment management are similar (Outdoor environmentalism vs. indoor environmentalism).
He went on to explain:
My dad lent me $3,000, and I took a carpet cleaning tech course offered at a local janitorial supply company.
That sounds like a reasonable startup cost, but how much can you make owning a carpet cleaning business?
Matt told us:
I make $9,000 in revenue per month.
According to ChemDry, their franchise owners average over $90k per franchise. The carpet business is a pretty reasonable industry to operate in.
Step 2: Choosing a Name for the Carpet Cleaning Business
Every carpet cleaning business is going to need a name. It’s how your customers will identify the carpet cleaning business.
Several considerations should be considered when naming your carpet cleaning business. Keep reading for some considerations.
Does the name explain the carpet cleaning business?
North Seattle Carpet Cleaning tells precisely what it does. It cleans carpets. Try to follow their example to create a company name that readily identifies your services.
Is the carpet cleaning business name easy to spell?
Make sure your carpet cleaning business name is easy to remember when using a search engine.
Register domain names for common misspellings and forward them to your website to ensure you don’t lose customers due to spelling mistakes.
Does the carpet cleaning business name include your location?
Including your state, county, or city identifies you as a local business. North Seattle Carpet Cleaning took this approach. Matt told us:
I went with a territorial name ‘North Seattle’ so it would naturally come up in online searches.
Does the branding fit the carpet cleaning business?
Does your name fit your branding? Some business owners focus on visual ideas for a logo before a name.
North Seattle Carpet Cleaning uses a logo that readily communicates what it does.
In addition to the name, the logo shows a person cleaning carpet and the Space Needle, a famous attraction that is readily identifiable as a Seattle landmark.
Register a .com
Find a name for which the .com domain is available. It’s the most recognizable. Use Namechk to find out if the domain name you want is available.
Give it a go!
See how people like it. Make sure to check what happens if people shorten it.
You wouldn’t want to name a carpet cleaning business Seattle Uber Clean Klub because it could get shortened to SUCK, and that isn’t what you want to communicate.
Check Google Trends. Read articles like Five Tools for Naming a Business. Check out our blog about cleaning business names. Finally, register your business name with the government. Keep reading to learn more about registering your name and choosing a legal structure.
Step 3: Writing a Carpet Cleaning Business Plan
Small business owners who write a business plan tend to have 30% faster growth because the business plan helps guide their decision-making.
Matt is on board with this thinking. He explained:
I initially wrote out a business plan. I think it helped orient me in the right direction. I think I should write it out again now that I’m in a different place than when I started.
If you want to start a successful carpet cleaning business, I highly recommend you write a business plan and use it to guide you while you grow your carpet cleaning business. The aspects that need to be covered include:
Business Plan Cover Page
Table of Contents
Executive Summary
Company Description
Description of Products and Services
Marketing Plan
SWOT Analysis
Competitor Data
Competitive Analysis
Marketing Expenses Strategy
Pricing Strategy
Distribution Channel Assessment
Operational Plan
Management and Organizational Strategy
Financial Statements and Financial Projections
Funding
This outline is directly from my previous article, How to Write A Business Plan. Make sure to read it and download the template to create a business plan that will walk you through the steps to starting a commercial cleaning business.
Step 4: How to Register a Carpet Cleaning Business
Once it’s time to register your new carpet cleaning business, you’ll deal with several government agencies.
Federal, state, and local laws govern an owner’s legal requirements when starting a business. Let’s look at the most common conditions.
Licenses, Permits, and Taxes
Each location has different licenses, permits, or tax forms required. Use the SBA License and Permits page to identify what your carpet cleaning business needs. Keep reading for information on different legal structures.
Options for Business Structures
Sole proprietorships and Limited Liability Companies are the most common business structures for carpet cleaning businesses, but some people opt for partnerships or corporations. We’ll discuss each.
Sole proprietorship
A sole proprietorship is the easiest way to start a company, but the structure doesn’t protect the owner’s assets from legal issues.
If something goes wrong, you could lose your carpet cleaning company and your home.
I’d only start a sole proprietorship if you need to save some money initially.
Because you’ll be in customers’ homes and offices providing your service, it is essential to prevent personal liability. As soon as you can, convert it to an LLC.
To start a sole proprietorship, fill out a particular tax form called a Schedule C. Sole proprietors can join the American Independent Business Alliance.
Limited Liability Corporation (LLC)
An LLC is the most common business structure used in the United States because the company protects the new business owner’s assets.
It’s similar to partnerships and corporations but can be a single-member LLC in most states. An LLC requires a document called an operating agreement.
Each state has different requirements. Here’s a link to find your state’s requirements. People may register in specific states due to the cost of doing business.
Delaware and Nevada are common states to file an LLC because of their business-friendly laws. Here’s a blog on the top 10 states to get an LLC.
Partnerships and corporations
Partnerships and corporations are typically for massive organizations or legal firms. Unless there is a specific reason you need a partnership, it is better to do a multi-person LLC.
Investopedia has good information about partnerships and corporations.
Apply for an EIN
Every business operating in the United States needs an employer identification number.
It’s like a social security number for your business. Apply for it on the IRS website. When filing taxes, it’s used on tax forms and to tie employees’ pay to the proper employer.
State/Local Business Licenses
Each location has different licenses, permits, or tax forms required. Use the SBA License and Permits page to identify what your business needs. You’ll want to look for a cleaning business license as the type of license.
Unemployment Insurance
The U.S. Chamber of Commerce has many resources on unemployment insurance (UI) and offers links to each state agency that handles state unemployment.
You’ll have to pay $420 per employee on a federal level plus any state UI.
Step 5: Funding a Carpet Cleaning Business
Opening a cleaning service requires time, money, or both. Hopefully, you’ve created a business plan already and have a good idea of the minimal financial resources necessary when starting a carpet cleaning business.
Here are some considerations you should look at when seeking funding:
What equipment, software, and inventory do I need?
How much will the carpet cleaning equipment cost?
Will I need a location where customers can come? If so, how much will it cost?
What are the costs for marketing and a website?
Will the company have employees or sub-contractors?
How much money is currently available to start a carpet cleaning service?
How many routine customers do I have? Will the current revenue and savings cover costs?
How much financing do I need?
How will I get the financing?
You’ll need to know the answer to these questions when starting a carpet cleaning service.
If you have created a business plan, you’ll already know the costs and financial needs of the cleaning services. Keep reading to learn more about ways to fund carpet cleaners.
Matt explained how he got funding and what it went to:
My dad lent me $3000 to get started. Much of the initial cost was the equipment I needed. I bought a portable carpet cleaning machine and the hoses and attachments necessary to start cleaning. I had to trade my car for a larger vehicle to transport the equipment to jobs. One of the first things I did was join BNI, which meant paying about $500 for their annual fees. I also took a carpet cleaning tech course offered at a local janitorial supply company.
How much does it cost to start a cleaning business?
Most commercial carpet cleaning businesses can be started with less than $5,000. A commercial carpet cleaning business will typically get funding from at least one of the following sources:
Personal Savings
Loans or Gifts from Friends and Family
Small Business Loans
Crowd Funding
Credit Cards
Personal Savings
If you’re working, put aside part of your income every paycheck. Most financial advisors recommend placing at least 8-10% of your income into savings.
One of the best ways to fund mobile carpet cleaning is to open a business bank account and transfer money into it every paycheck.
This will help you develop a banking relationship under your business name if you decide to take out a business loan in the future.
Nerd Wallet has a great list of free business checking accounts. Check it out and decide which one is best for you.
Loans or Gifts from Friends and Family
If your friends and family have the money, they may be willing to help launch your cleaning business. Just make sure you get the loan terms or gift in writing. Make sure to follow through on the agreement.
You may be able to negotiate pre-payment for services to fund your small business if you can negotiate to provide your family and friends your business services, congratulations! You have your first customers.
I thought, “When I start my own business, everyone I know will be supportive.” I was wrong. Most of my network fell into two categories:
“Isn’t this risky? Shouldn’t you go get a job?”
“Can I get your service for free?”
Neither of these responses helped start a business. Be careful about working for your personal network. They can be a drain on your business.
Small Business Loans
A lady holding an iPad and a credit card
Most banks offer small business loans. If you can qualify for them, loans are a great way to start a business. Unfortunately, the requirements for business loans have become more challenging than they were in the past.
Banks want to invest in a successful business, so they’ll be looking to loan to people in a growing field and have unique ideas.
If your business model is similar to existing businesses, you may find it challenging to get bank loans before generating substantial revenue.
Business owners should document their business idea meticulously before applying for loans.
A bank will expect entrepreneurs to thoroughly understand the industry, customer, and costs associated with the business idea. The business plan will be crucial while applying with banks.
Upflip has developed relationships with lenders to help our readers seek business funding. Check out our Business Loans page for our preferred resources.
Crowd Funding
With the rise of social media and online businesses, companies have a new way of reaching customers and getting funding for their business idea.
Crowdfunding is a way to start a business where you come up with the business idea, create a request for funding, and people who like the idea help fund it.
GoFundMe and Kickstarter are the most well-known crowdfunding sites, but others help people start businesses. Take a look at this article to find the right crowdfunding site for you.
Read our blog about Pooch Selfie to get insight into Jason Hernandez’s process to start his company with Kickstarter.
Credit Cards
You can use business or personal credit cards to start a carpet cleaning business, but their rates can dramatically increase the costs.
Businesses that use credit cards to start a carpet cleaning business should know the interest rates and make sure they have the funds to pay the monthly bills.
If you have to pay interest on the credit because you didn’t pay it in full, you may be paying up to 25%.
While credit cards are one of the more costly ways to start a business, carpet cleaning, they are also one of the easiest. As long as the business owner has good credit, it is easy to get a credit card. After routinely paying it off, you can request a higher credit limit. For some, it might be the best option.
I prefer using Credit Karma to decide which kind of personal credit card to get. They have recommendations based on your individual credit history. Find out what they recommend online today.