Starting Up a “Cleaning” Business

Starting a small business has always given the impression of being a preference of risk takers and dreamers who fancy themselves as their own bosses. At the least, people who work for companies often have this misconception in mind mainly because their jobs guarantee regular compensation, medical and loan benefits and security of tenure. This bold step may not be for all people but there are certain advantages in taking it. For one, accountability lies on one’s self with no bosses to contend with. The net profit (less taxes, employee salaries and overhead) goes straight to one’s pocket. More importantly, the decisions involved in running the business lies on the proprietor. The absence of time-consuming deliberations will result in the quick implementation of business strategies.

Starting a cleaning business does not only rely on the cleaning process and having trained employees. With the availability of other related businesses, there is a certain thing called competition to think about. Moreover, the chances that people will know about the newly set-up cleaning business are minimal when no steps have been taken to advertise.

Having confidence in the service that will be delivered to potential customers, the proprietor should invest some money in advertising. One effective way of doing this is to plaster the name of the business on the van. Visibility is the key to making people know about the business. Studies have shown that word-of-mouth or recommendations by friends and family is a very influential factor in generating customers or at the extreme, ruin your cleaning business. This is the reason why it should not stop at advertising. 

Advertising should go hand in hand with effective marketing skills. These skills aim at satisfying the needs and even exceeding the expectations of the customer to hope for repeat business and positive word-of-mouth. Diligence to inquiries should be done to make sure that they get sent within the day. Moreover, the quote should state the solution to the problem and of course the cost breakdown to give the impression to the potential customer that the proprietor is an expert and a professional. 

“Cash flow is king.” Paying attention to this catchy business fact will lead the proprietor to pay more attention on invoicing and minimizing account receivables.

Having a good collection system in place at the beginning of the business will certainly pay off in the future. Payments in this type of business do not only comprise cash up-front. Depending on what was agreed upon on the contract negotiation stage, there are payments that have partial cash up-front at the start of the contract. This can easily fill in the budget for the initial overhead that needs to be spent on completing the job contract. However, there are payments billed in arrears. What does this mean? The average is 45-60 days but there are cases wherein it may take up to 90 days before payment is made. This will certainly pinch the cash flow especially if it is a big contract. The workaround for this is to have a financial plan wherein expenses are forecasted and resources earned will be properly allocated across a period of time. Another option for this is to hire the services of a factoring company however this will of course result in losing between 5% and 15% of the contract value.