Carpet Cleaning

How To Start A Profitable Carpet Cleaning Company: A Detailed Guide

Carpet cleaning business owners have a variety of opportunities available to them. According to IBISWorld, the carpet cleaning sector will generate $4.6 billion in revenue in 2021.

So, how do you go about starting a successful carpet cleaning business? What goes into starting a carpet cleaning business from the ground up? And, after your company is up and running, how do you get the word out and start attracting customers?

Business overview

Carpet cleaning companies provide either residential or commercial services or both. Deep cleaning of rugs, carpets, and upholstery is one of the services offered. Some businesses also provide specialist services such as carpet restoration, rug dyeing, and more. These companies bring in professional-grade equipment that the average household or company owner does not have, allowing them to perform a more thorough cleaning to remove stains and filth that regular retail carpet cleaning chemicals cannot remove.

Is carpet cleaning a profitable business?

Carpet Cleaning

Depending on how you run your carpet cleaning business, it has the potential to be a very profitable one.

Most towns have a high need for both residential and commercial carpet cleaning services. Although startup costs are high, carpet cleaners who operate their company properly can earn $75 to $150 per hour with little ongoing overhead. This may be a recession-proof business, especially if you can win a few retail clients who require their carpets to be fresh and clean at all times.

Why should you start a carpet cleaning business?

First and foremost, before we go into how to start a carpet cleaning business, let us discuss why you might want to consider starting a carpet cleaning business in the first place.

Carpet cleaning can be a terrific opportunity for business owners for several reasons, including:

  • It has the potential to be profitable. Carpet cleaners can earn between.35 and.50 cents per square foot, depending on the services provided, according to Strong Carpet Cleaning Systems industry data, which can convert to up to $150 per hour.
  • It provides adaptability. When you operate a carpet cleaning business, you are the one in charge. You can choose how many clients you want to work with, when and how long you want to work, and how much you want to charge for your services.
  • There are a plethora of opportunities. A considerable proportion of commercial and residential buildings have carpet covering at least some of the square footage—and those carpets must be cleaned regularly, creating a huge opportunity for carpet cleaning business owners.

Who is the target market for your carpet cleaning business?

The target market for a carpet cleaning company could include homeowners, renters, landlords, commercial property owners, business owners, and others.

Steps to starting a carpet cleaning business

Carpet Cleaning

Determine the type of carpet cleaning business you would like to start

The first step in building a successful carpet cleaning empire? Choosing the type of business you want to create and, more precisely, the services your carpet cleaning company will provide consumers.

There are two major factors to make when deciding which business model is best for you:

Residential Carpet Cleaning Services vs. Commercial Carpet Cleaning

Washing 800 feet of carpet in a home is not the same as washing 30,000 square feet of carpet in a commercial building; establishing a business around huge commercial tasks necessitates an entirely different approach than working with homeowners on individual jobs. So, before you get too far into developing your carpet cleaning business, you need to decide whether you want to go the commercial or residential route.

There are no right or wrong decisions; both business models have benefits and drawbacks. Commercial structures, for example, are often larger than individual homes, so you’ll earn more per job—but they’re also time demanding, so you won’t be able to take on as many clients.

On the other hand, residential works don’t require as much time, so you’ll be able to take on more clients—but because the area is smaller, you won’t be able to charge as much per job as you would for commercial projects.

Commercial buildings receive a lot of traffic, so their carpets are likely to require more intense cleaning than those found in individual homes—but because they are running a business out of the space (and, in many cases, serving the public), they are more likely to commit to a regular carpet cleaning schedule.

Residential carpets will most likely be easier to clean, but clients may only need their carpets cleaned a few times per year because they see less traffic.

Starting Your Operation vs. Franchising

The other major decision you must make when starting your carpet cleaning business is to build it from the ground up or become a franchisee for an existing carpet cleaning company.

Again, each model has advantages and disadvantages. When you start a business from scratch, you have complete control over everything from work volume to work hours to pricing—but getting your name out there, finding clients, and reaching a sustainable level of work can be difficult. On the other hand, when you open a franchise business, you get the benefit of operating under a brand that already has market recognition, which can make it easier to find clients—but because you’re operating under that business name, you also have to follow their rules, which gives you less flexibility as a business owner.

Obtain training and certification

You must have significant carpet cleaning experience before you can sell your services and entrust your clients’ property to you. Even better, you can get properly trained and licensed. Consider taking an IICRC (Institute of Inspection Cleaning and Restoration Certification) course to become certified as a Commercial Carpet Maintenance Technician, Carpet Cleaning Technician,  Rug Cleaning Technician, and other similar specializations. You can either attend an IICRC course in person or obtain an online certification.

Alternatively, you can look into TMF Academy’s online-only training courses. Additionally, several equipment manufacturers, such as Jon-Don and Rotovac, provide educational materials and training programs for aspiring carpet cleaning business owners. Whatever training you choose, make certain that any person you hire is also certified.

Create a business plan

Once you’ve decided on the type of carpet cleaning business you want to establish, you’ll need to develop a business strategy.

Consider your business plan to be a roadmap; it lays out the actions you need to follow to get your business up and running and provides clear direction on how to get from where you are to where you want to go.

Your business strategy should include the following items:

  • Target market. Who are your ideal clients?
  • Competitor analysis. What companies do you regard as competitors? 
  • What kinds of carpet cleaning services do they offer? How is your company unique, and how will you communicate this to your target customers?
  • Company name. What will the name of your company be?
  • The startup budget. Before you start your firm, you need to know how much capital you’ll need to cover your beginning expenditures, such as equipment, marketing, and staffing costs, and how you’ll spend that money.
  • Pricing structure. How would you charge your customers for those services? For example, will you charge by the hour or by the square foot? What kind of carpet services would you provide to your customers?
  • Revenue targets. What are your revenue projections for the first year of operation?
  • Strategic, operational planning. How do you intend to run your company? How will your day-to-day operations be structured?
  • Staffing requirements. Will you hire more carpet cleaners? If so, how many individuals will you hire, and how much will they be paid?
  • Marketing plan. How do you want to market your company, interact with customers, and offer your services?
  • Services. What kind of carpet services are you going to offer your customers?

Get a business license and register it

Now that you’ve built the groundwork for your carpet cleaning company, it’s time to make it official by obtaining the required licenses and permissions and registering your company with your state.

First, contact the clerk’s office in your city, town, or county to learn about local licensing and permit requirements for cleaning firms. Check out our state-by-state guide to licenses and permissions for more information.

Then you’ll need to choose a business entity and register it. If you own and operate your carpet cleaning business on your own or with your spouse, you can choose a sole proprietorship, which does not require state registration. However, because sole proprietorships do not recognize the owner as a different entity from the firm, you will be personally liable for the debts and liabilities of your business.

You might want to explore forming an LLC instead. Registering an LLC with your state is simple. This structure gives you legal advantages that sole proprietorships do not, most notably that your assets will not be at risk if your firm encounters debt-related or other legal troubles.

Open a business bank account

We recommend opening a business checking account at this point to keep your business and personal finances separate. Separating your finances is important for protecting your assets from business-related legal issues (assuming you’re properly registered). Separating your financial information will also make bookkeeping much easier, making applying for business loans much easier.

Get the appropriate insurance

The final piece of paperwork is to obtain the necessary business insurance. Begin with general liability insurance, which will cover your company from a wide range of potential claims, including property damage, bodily injury, and personal injury. Consider taking up workers’ compensation, unemployment, and state disability insurance if you’re employing staff, as well as commercial auto insurance, which can pay for damages done to your company’s truck in the event of an accident, as well as medical and legal bills.

Stock up on carpet cleaning equipment and cleaning supplies

Carpet Cleaning

If you’re going to clean carpets, you’ll need to get the right cleaning products and equipment—and you’ll need to do this before you start scheduling tasks.

The supplies and equipment you’ll require will be determined by your cleaning approach and the services you intend to provide. For example, if you want to employ hot water extraction, you’ll need an extractor. If you’re going to employ dry carpet cleaning, you’ll need to obtain the correct cleaning chemicals to pre-treat the carpet fibers and break down the dirt before vacuuming.

Funding for your company

It costs money to buy equipment, license your business, get licensed, and cover other fees associated with starting a carpet cleaning service. As a result, it’s important that you set aside enough money to pay these startup expenditures, as well as your daily expenses, once you’re up and running. Hopefully, you estimated the exact amount you needed when you established your initial business budget.

The majority of startup investment comes from your own money. Because it is difficult for new firms to obtain a business loan because they lack the financial track record that lenders require to make a credit decision, brand-new business owners frequently take out personal loans for business, draw from personal resources, or borrow from family and friends.

However, if you want to get started right away with business finance, start with a business credit card to pay for your modest, daily needs. Applying for a company credit card online takes only a few minutes, and even new enterprises with little or no financial history can qualify.

You can also try your luck with equipment finance, which will allow you to get your hands on the necessary (and pricey) tools of your trade. For new enterprises, equipment borrowing can be a relatively easy kind of business financing. Because the equipment itself serves as collateral if you default on your loan payments, lenders are more confident in granting equipment loans to businesses that lack the strong financials required to qualify for traditional loans.

Hire employees

Multiple personnel may be required depending on the size of a carpet cleaning service.

Carpet cleaners earn an average of $13.20 per hour, or $35,370 per year, according to PayScale. In addition to employee pay, remember to budget for other employee-related expenses like health insurance premiums, unemployment contributions, paid time off, and worker’s compensation.

Spread the word about your carpet cleaning company

When it comes to marketing your carpet cleaning service, there are several options available to you, including:

  • Advertising. Whether traditional (such as flyers or newspaper advertising) or digital (such as Google AdWords), advertising may be a terrific method to bring your new business in front of the clients you want to work with.
  • Cold calling. Cold phoning local company owners or commercial property owners might be a terrific approach to create an introduction if you’re starting a commercial carpet cleaning business.
  • Word-of-mouth promotion. Once you begin taking on carpet cleaning jobs, your existing clientele can play a significant part in marketing your company. After completing a task, request that consumers leave a favorable review on Google or Yelp, provide referrals (such as a neighbor who needs their carpet cleaned), or write a testimonial for your website. Use of social media. Next-door and other location-based social media apps can be a terrific way to spread the word about your new business and interact with potential clients in your neighborhood.

Create an accounting system

Setting up an accounting system for your carpet cleaning service is crucial to the long-term profitability of your company.

Staying on top of taxes keeps the company out of problems with the government. Still, the figures can also be used to analyze and monitor patterns and cash flow in the company, allowing it to maximize earnings.

Skills, experience, and education are all beneficial in establishing a carpet cleaning business. 

Carpet Cleaning

Although a business degree is not required to start a carpet cleaning firm, business owners can benefit from possessing specific abilities and experiences.

Mechanical knowledge. Carpet cleaning equipment sees heavy use and must be serviced regularly. The more a business owner can do to service and repair equipment, the less downtime a business will experience. Being able to detect and repair mechanical problems on your own can also save you money on costly repair charges.

Physical strength. Transporting and operating carpet cleaning equipment is physically hard and necessitates using someone strong enough to transfer equipment multiple times a day.

Working knowledge of the cleaning sector. Understanding the various chemicals and techniques used in the carpet cleaning industry will ensure that any business owner understands how to address various stains on various materials for the best outcomes.

If you lack industry experience or want to get training and certification to stay ahead of the competition, consider the Institute of Inspection, Cleaning, and Restoration Certification (IICRC), a non-profit certifying body for the cleaning and restoration business.

Pay attention to the details. It’s all about the details when it comes to carpet cleaning. A business owner must pay attention to details in the clients’ rooms to ensure that the job is completed completely and thoroughly to accomplish a successful job.

Management abilities. When a carpet cleaning company is large enough to hire staff, management skills and experience come in handy when training and supervising workers. As the team grows and the owner no longer actively monitors jobs, employees must use their time properly to remain profitable.

Customer service experience. Previous customer service experience will put a carpet cleaning company owner ahead of the game in everything from taking calls to handling customer queries and issues. Because many carpet cleaning customers are repeat customers, offering a great experience to customers with each cleaning is important to their profits.

Marketing skills. Marketing a carpet cleaning firm requires some skill, and a business owner can save money on marketing if they can do some or all of it themselves.

Considerations before starting a carpet cleaning business

A carpet cleaning business does not require a typical storefront, but it requires an initial investment in equipment. Because carpet cleaning is technical and involves the use of chemicals, it is better if you can work as an apprentice for another carpet cleaner before venturing out on your own.

This way, you can be certain that this is the perfect chance for you, and you can learn how to keep yourself safe, apply the finest procedures for different carpets and conditions, and obtain the greatest results from your work. If you cannot find an apprenticeship opportunity, you will most likely need to invest in some training to learn how to utilize the cleaning equipment and chemicals.

You will have more control over every area of your business if you start your own. It may take some time to establish your reputation, but you can build a loyal following and run a prosperous business with a commitment to providing excellent customer service.

Consider recurring payments from your customers instead of trying to accumulate new customers every time. Creating a custom package for your customer means, you can create even more customer loyalty. You can also use Probill software to help create invoices, send mail invoices, and recurring payment reminders for your customer.

How much does it cost to begin a carpet cleaning business?

You’re undoubtedly concerned about the cost of beginning a carpet cleaning business. How much capital do you require to get your company up and running?

While the cost of starting a business will vary depending on a variety of factors, there are a few initial costs you should consider, including:

  • The cost of registration and insurance. Expect to pay between $150 and $300 for your initial business registration, depending on where you start your firm. In addition, depending on your coverage, you should anticipate paying an additional $200 to $1000 each year in insurance expenses.
  • Transportation costs. You’ll need transportation to carry you and your equipment to and from tasks, usually a van or a truck, which can cost anywhere from $15,000 to $50,000 if you need to buy one.
  • Marketing costs. Marketing is one of the most variable costs in your business; you might rely on word-of-mouth marketing and spend nothing on marketing, or you can launch a large-scale digital advertising campaign and spend $20,000 in a month. Many new firms fall somewhere in the middle, spending $5,000 to $10,000 on their initial marketing effort.
  • Franchising fees. If you decide to create a carpet cleaning franchise, be prepared to pay a lot of money; between franchising and marketing fees, you might easily spend more than $35,000 to get your business up and running.
  • Cleaning supplies. The cost of cleaning equipment will vary depending on the approach you use. A portable extractor will cost between $2000 and $4000 if you plan to use hot water extraction. Expect to pay between $3000 and $8000 for the essential equipment if you wish to offer low moisture carpet cleaning.

The startup costs of a carpet cleaning company vary- but you can expect to spend between $5000 to $80,000

What should I know about taxes and setting up the business?

The key to remaining IRS compliant is to keep meticulous records.

Of course, keep your receipts. While many small business owners rely on tax software to help them remain on track, hiring a local accountant specializing in small business taxes is safer and easier. They can assist you in understanding how to organize your business and optimize your deductions to reduce your tax burden.

You can start your firm as a sole proprietorship or as a limited liability corporation (LLC). There are numerous aspects to consider when making this decision, and this is an area where you will need competent legal counsel. If you decide to form an LLC, a lawyer can assist you in completing the necessary papers.

Is it possible to establish a carpet cleaning business from home?

Many successful business owners operate their carpet cleaning companies from their homes. Make sure you have a legal and safe area to park your truck. You may need to make space in your home for extra cleaning supplies as well as an office.

What is the difference between a commercial carpet cleaning company and a residential carpet cleaning company?

Commercial carpet cleaners often use more expensive and powerful equipment. They clean more carpet square feet. They do, however, have the option of scheduling recurring appointments with organizations that require frequent carpet cleaning. With only a few accounts, this might help you quickly grow a carpet cleaning business.

Residential carpet cleaning firms may need to serve many customers to make a good living, but initial costs may be lower.

Is there any other resource you can recommend for learning how to establish your own carpet cleaning business?

Start with the Small Business Association’s Create Your Business Plan website. This free resource walks you through the process of creating a complete business plan step by step. Each state’s Small Business Association maintains a center dedicated to assisting entrepreneurs.

Also, take a look at the SCORE Business Plan page. This free resource includes free workshops and podcasts to assist you in getting started with your carpet cleaning business. SCORE can also assist you with your marketing strategy.

Bottom line: is it profitable to own a carpet cleaning company?

Now that you know how to build a carpet cleaning business from the ground up, you have all the information you need to start your own carpet cleaning business.

But you undoubtedly have one main question: “Is it profitable to establish a carpet cleaning business?”

And the answer is that it most certainly can be. Suppose you can keep startup costs low (such as opening your own business instead of a franchise to avoid franchising fees and starting with smaller jobs to avoid investing in too much equipment), find the right clients, and develop a pricing strategy that works for you and your customers. In that case, you can turn a profit with a carpet cleaning business—and turn your business into a lucrative, long-term investment.