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You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple step guide to starting your post construction cleaning business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a post construction cleaning business?
Startup costs are relatively low—sitting around $2,000. Materials will need to be purchased. Normally, a cleanup crew needs chemical cleaners, mops, brooms, a shop vac, ladders, window cleaning materials, and similar items.
You’ll also need a wheelbarrow and other hauling materials. While you may not need a workshop, having one can certainly help. Monthly rent, for a small shop, is about $2,000. Consider spending another $1,000 on startup advertisement costs. These costs will cover detailed brochures, promotional packages, and similar items.
What are the ongoing expenses for a post construction cleaning business?
A construction cleaning crew’s expenses aren’t too high. Cleaning materials, per job, can amount to less than $100. These expenses account for used cleaners, equipment depreciation and worker time. On average, a cleaning crew operator is paid between $20 and $30 for their time. Ideally, you’ll be paying your workers more than you’ll be paying for materials.
Who is the target market?
Typical construction cleanup company clients are commercial and residential property owners. A construction crew can work on a home, a warehouse, a factory, or even an apartment complex. Because they can serve many areas, the best clients are those who communicate effectively. To make more money, a construction cleanup company may provide services to networks such as apartments, hotels, and business strips.
How does a post construction cleaning business make money?
A construction cleanup service is paid by project. Normally, a project includes sanitization. A crew must clean the area, making sure it’s safe and operable. All thresholds, too, must be cleaned. Once all dust, dirt, and other materials have been lifted, the crew will have completed its job. While a crew typically makes money for cleanup projects, they can also make money by preparing spaces for construction. Construction is a lengthy process, and a crew may be needed before, during, or after an area is tended to.
How much can you charge customers?
Prices for pre-and post-construction cleanup jobs vary. That said, the average price for a residential cleaning job is between $500 and $800. Meanwhile, commercial cleanup budgets are about $0.10 to $0.50 per square foot. Most homeowners spend between $227 and $663 per service. Specialty cleanings can be charged at around $1,000.
How much profit can a post construction cleaning business make?
A successful construction cleanup service can make about $100,000 in revenue, annually. The leader of the construction cleanup crew leader makes around $50,000. Again, most expenses are directed towards paying other employees. Because construction cleanup services are served on a client-to-client basis, a crew’s success depends on its area.
How can you make your business more profitable?
Post-construction cleanup is pretty niche. For this reason, it’s a good idea to serve commercial properties. These properties have a lot of cleanliness regulations. Also, find homeowners who are looking for minor renovations. Typically, these clients will pay more for square-foot cleaning coverage. If a client isn’t paying much for overall construction, they’ll splurge more on post-construction cleanup.
What will you name your business?
Choosing the right name is very important. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your post construction cleaning business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
For most small businesses forming an LLC is a great option, but if you still want to weigh all your options check our our article, What Structure Should I Choose for My Business?
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a construction cleanup service. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
In businesses where services are provided on an extended basis, a services contract is often put in place outlining terms and conditions of service. Construction cleanup services should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example of one such service agreement from a window cleaning service.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your construction cleanup business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a post construction cleaning business
Find new leads via local hardware stores. Locations like Ace Hardware, Home Depot, and Lowe’s Home Improvement are good locations. Promote your services via brochures and past-project pictures.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
To attract customers, become well-acquainted with local construction providers. If these providers service commercial properties, contact the properties. Express their need to meet industry standards. If you’re working alongside residential construction projects, show any homeowners your brochure. Retaining individual customers can be difficult—as construction is normally a one-time deal. That said, partnering with local businesses and construction groups can assure ongoing work.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Post Construction Cleaning Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Anyone who’s proficient in maintenance, construction or handiwork can work in a construction cleanup service. If you want to own a construction cleanup service, you’ll need to have a background in management. While no formal education is needed, these skills should be secured through experience.
What happens during a typical day at a post construction cleaning business?
A construction cleanup crew services both commercial and residential construction sites. A cleanup crew is in charge of dusting, shining, and polishing appliances. They also clean furnishings and hardware. Often a construction cleanup company will clear large debris. Because they’re relied on for garbage disposal, most services tie in with local waste laws. A construction cleanup company must also reach out to construction companies. A construction cleanup company thrives in construction sites, so a deep understanding of area codes is important.
What are some skills and experiences that will help you build a successful post construction cleaning business?
Because a cleanup service is sometimes viewed as an accessory service, they often need to seek out new clients. Cleaning skills count. You should know how to remove sticker labels, vacuum window tracks, use a shop vac, remove furniture drawers, and clean sawdust. You should also understand the use of different cleaning solutions. Dusting, polishing, cleaning, and mopping are useful skills.
From an administrative standpoint, it’s important to understand local marketing. A construction cleanup business needs to search for its clients, so understanding the area’s construction needs can help. What areas are changing? Are new neighborhoods being developed? What about new shops?
What is the growth potential for a post construction cleaning business?
A lot of construction cleanup services work locally. Depending on the area, a cleanup service can expand to serve a network of providers. Often, a cleanup service will thrive alongside professional construction groups. If an area has a lot of urban development, a construction cleanup service can expect to find a lot of work. Competition can be fierce, however. Construction cleanup isn’t sought after due to its high-quality amenities. Sometimes, residents assume it’s akin to maintenance work. For this reason, a construction cleanup business needs to offer quick, affordable services to thrive in the professional world. Specialization with hardwood, marble, or other valuable materials is a plus. If a construction cleanup provider can clean unique services, they’ll offer unique value.
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One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a post construction cleaning business?
You should visit your clients in person. Because construction cleanup services are specific to location, the job, and the construction company, clients will want to meet you. Also, have a solid promotional package to show them. All potential customers should understand the scope of your work.
How and when to build a team
You should start with a team of two to three people. While you can clean construction areas yourself, it’s advisable to expand your services from a firm foundation. More workers equal speedier services. At the start, speedy services will get you more contracts.