Is carpet cleaning profitable?
Depending on how you run your carpet cleaning business, it has the potential to be a highly lucrative type of business.
There’s a great need for both residential and commercial carpet cleaning businesses in most towns. Startup costs may be expensive, but carpet cleaners who run their businesses well can make around $25 to $75 for one room with little ongoing overhead.
This is a potentially recession-proof business, especially if you land a few retail clients who must keep their carpets fresh and clean at all times.
First, you need to invest in professional carpet cleaning equipment before getting started. Then, start small with a few local clients to perfect your pricing structure. This gives you the chance to make sure your rates are fair and ensure that you’ll make a profit.
The good news is that setting up a carpet cleaning business doesn’t require you to hire (and pay) employees. Other than your initial investment in equipment, ongoing costs are fairly low for most startup carpet cleaning businesses. You can start your business from home, eliminating the need to pay rent for a business location.
Common questions about starting a carpet cleaning business
What do I need to do before I start my business?
Your carpet cleaning business may need specific licenses to operate in your town or city like any other small business. Check with your local small business association to learn more about any business license, permit and certification requirements in your area.
You’ll also want to create a basic business plan. It doesn’t have to be long or robust, but it can serve as a roadmap for your goals and what kind of business you want to build. If you seek funding from lenders, they’ll want to see a complete business plan with your financial plan.
What should I know about taxes and setting up the business?
The key to staying in compliance with the IRS is keeping great records.
Hang on to receipts and do basic bookkeeping and accounting to track your cash flow. You can use spreadsheets like Excel or Google Sheets first and then transition to accounting software as you grow.
While many small business owners rely on tax software to help them stay on track, you can hire a local accountant specializing in small business taxes. They can help you understand how to structure your business and maximize your deductions to minimize your tax burden.
You can choose to operate your business as a sole proprietorship or start a limited liability corporation (LLC). Many factors go into making this choice, and this is an area where you’ll want solid legal advice. A lawyer can help you complete the appropriate paperwork to set up an LLC if you choose to do so.
Do I need insurance to start a carpet cleaning business?
Now that you have a better idea of starting a carpet cleaning company, it’s time to learn more about getting the right kind of business insurance.
Carpet cleaning insurance is almost always required due to the risk of injury and property damage. It protects your business from a variety of risks and financial losses. Types of coverage can include:
- General liability. This coverage protects you from costs related to damage to someone’s property and accidents that hurt someone. General liability insurance is the most common type of business insurance.
- Contractors’ E&O. Also known as professional liability, this coverage helps you defend yourself if you’re accused of making a mistake that causes someone to lose money.
- Commercial Auto. This insurance protects you from expenses related to injuries and damage involving your business vehicles. This coverage is also usually required by law for business-owned vehicles.
- Workers’ Compensation. Workers’ comp can help cover workplace injuries, related medical bills and lost wages. Workers’ compensation insurance is usually required by law if you have employees.
- Tools & Equipment. This coverage covers costs related to the theft or damage of your tools by helping pay for replacement and repair costs.
Your clients may require proof of insurance, so it’s crucial to provide a Certificate of Insurance online and on the spot.
What kind of carpet cleaning equipment do I need?
One of the most important decisions you’ll make about your cleaning business is the kind of cleaning you’ll do. Will you offer hot water and steam cleaning, dry foam cleaning, or dry chemical cleaning?
Dry foam is widely considered the least effective cleaning method of the three. Most carpet cleaning businesses offer dry chemical or hot water and steam extraction.
With the dry chemical method, you’ll invest in a dry cleaning compound and a special two-head powerful vacuum that agitates the compound to help trap dirt. With this method, the carpet requires zero drying time, making it an easier sell, especially for commercial carpet cleaning.
The hot water extraction method requires either a truck-mounted or portable hot water extraction unit. The truck-mounted cleaner provides more power, making it far superior to the smaller extractor units that people can rent at the local hardware store. However, you need to empty a portable unit regularly, which can be awkward when working in a home. The most powerful portable units require separate machines for solution application and vacuuming.
No matter which method you choose, it’s a good idea to search for used equipment when getting started. You’ll save money, and you may develop a preference for one type of cleaning based on personal experience.
Can I start a carpet cleaning business from home?
Many successful entrepreneurs run their new businesses from home. Make sure you have a place to legally and safely park your truck. You may need to make room in your home for extra cleaning supplies and an office, as well.
What’s the difference between commercial carpet cleaning and residential carpet cleaning?
Commercial carpet cleaning businesses typically have more expensive and more powerful equipment. They clean more square feet of carpet and have more opportunities to book recurring appointments with businesses that need regular cleaning. This could help quickly build a carpet cleaning business with only a few accounts.
Residential carpet cleaning businesses may need to serve more clients to make a great living. However, the startup costs may be lower in the beginning.
More resources on how to start your own carpet cleaning business
Start with the Small Business Association (SBA). They offer free resources to help you understand what’s needed to start your business and can walk you through it step-by-step. The SBA has a center dedicated to helping entrepreneurs in each state.
Check out SCORE, as well. They have free workshops and podcasts to help you start your carpet cleaning business. SCORE can also help with your marketing plan, finding a mentor and funding options.
When you first start your carpet cleaning business in your hometown, talk to local business owners as well as your friends and neighbors to understand their needs. For example, maybe there’s demand for an organic carpet cleaning service that the other carpet cleaners in the area don’t currently offer.
Be sure to make connections in your local community with other business owners. It’s easy to do the bulk of your research online, but there’s a lot to learn about the licenses and permits you’ll need to run a business in your town.
And, of course, making local connections helps you get your business’ name into the world via word of mouth. You can build a customer base through your connections, and get referrals through satisfied homeowners or commercial customers. Networking with local real estate agents or property managers is a good place to start.
