How To Start a Carpet Cleaning Business

How To Start a Carpet Cleaning Business

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Posted by Brad Smith

November 4, 2019

Perhaps you’ve worked in the carpet cleaning industry and are ready to strike out on your own. Or you’re an entrepreneur looking for a new venture. Either way, this guide is for you. 

In it, you’ll find information about the legal requirements, the costs, how to find business leads in your local area, and more. And we use real-life examples of business owners from around the U.S. 

Finally, we’ve summarized all the steps you’ll need to take to start your business in a downloadable checklist.

Let's get started!

How To Start a Carpet Cleaning Business

Initial Carpet Cleaning Costs

#1. Overhead Costs

#2. Break-Even Point Analysis

Numbers to Start Tracking

Pro Tip: Talk to Your Local Government

The Legal Stuff: Carpet Cleaning Business Requirements

Carpet Cleaning Franchise Opportunities: Worth it?

The Technical Stuff: Carpet Cleaning Scheduling, Invoicing, Payment & Quickbooks

Streamline Your Business As Much As Possible

Additional Resources From Our Blog

Carpet Cleaning Equipment

Additional Resources From Our Blog

Positioning Yourself in The Market

Choosing Your Market

Differentiating Yourself and Crafting Your Message

Specialization

Guarantees

Carpet Cleaning Services and Pricing

Services

Create Recurring Service Plans

Additional Resources From Our Blog

Carpet Cleaning Marketing: How to Get Leads

Do You Need To Pay for Advertising?

Prioritize Reviews and Referrals

Other Carpet Cleaning Promotional Ideas

Surprising Places To Get Leads

Customer Retention Ideas

Additional Resources From Our Blog

Carpet Cleaning Hiring: Your Path to Growth

Do You Need to Hire?

But Are You Ready?

How do you know if you’re financially capable?

Have Your Processes in Place

How to Hire, Train and Manage people

Additional Resources From Our Blog

Where to Go From Here

How to Start a Carpet Cleaning Business Checklist

Where Can You Get Help?

Carpet Cleaning Business Startup Costs

The Legal Stuff

The Technical Stuff

Equipment Needed

Positioning Yourself in the Market

Carpet Cleaning Pricing

Your Offerings: Carpet Cleaning Services List

How to Get Leads: Carpet Cleaning Marketing Services

Your Path to Growth: Carpet Cleaning Hiring

Initial Carpet Cleaning Costs

Like every business, a carpet cleaning business requires startup funds to get going. Besides carpet cleaning equipment, you’ll also need to invest in things like registration and licensing fees, insurance, and marketing costs. We’ll go over some ways to be smart about your financials.

Steps

  1. Add up your business expenses

  2. Assess your personal expenses not covered by other income or savings

  3. Estimate your initial monthly revenue

  4. Calculate your break-even point

  5. Set revenue and profit margin goals

  6. Figure out your business credit score

  7. Compare financial options for your startup costs

  8. Write a business plan

Mighty Clean’s Startup Story

Milton Green had been in the carpet cleaning industry for over twenty years before he decided to start his own company with his wife, Julie. They founded Mighty Clean Carpet and Upholstery as cheaply as they could and built up the business piece by piece without taking on a lot of debt:

“We basically started our company with about $7,000 worth of capital, bought a carpet cleaning machine that went into the back of my wife's minivan, went out there and did the legwork and landed a couple of good accounts that helped us fund everything else.”

Just a couple of months in, they were hired by a hotel that brought in over $60,000 in the first year. “It was the recurring business that we got from the hotel that actually helped us grow and got off the ground completely.”

The Big Takeaway: Start out as small as you can while maintaining a professional process. Focus on building strong customer relationships that can help you grow.

How to Set a Revenue Goal

In our guide to calculating your break-even point , we walk through how to separate and calculate all of your expenses. This is an essential step to figuring out what your profit margin will be. After you know what it will take to break even, you can begin to look at what kind of revenue is possible!

Here are some things to consider when setting a revenue goal:

  • What are your personal living expenses?

  • What funding will you need to grow your business?

  • Do you want to hire? How much will it cost to maintain a second salary?

  • What kind of savings would you like to have?

Setting a revenue goal will help you set growth goals for your company. How many customers will you need to meet your revenue goal and how many techs will it take to serve those customers? It pays off to be a data-driven business.

Numbers to Start Tracking 

Here are a few numbers you should also look out for:

Average Transaction Value (ATV) or Average Order Value (AOV): The average dollar amount that a customer spends on your services. It’s not easy to attract new customers, so increasing your ATV/AOV will give you a higher return on your investment when it comes to your marketing and sales.

Average Revenue Per Customer (ARPC): The average dollar amount you can expect to generate from an individual customer. Unlike transaction value, it’s not per job. If you can increase how much a customer spends on every transaction, and how many frequently you serve this customer, then the average revenue per client will be high (a sign of a thriving business).

And by the way, with Housecall Pro, you can run these reports and keep track of these numbers.

The Legal Stuff: Carpet Cleaning Business Requirements

To run your own business, you’ll need to register your business on the federal, state and local levels, including registering for a tax ID. You’ll need this ID to open a business banking account and get insured. If you’re not sure how to register, you can work with a registered agent.

Steps

  1. Make sure you have all the licenses you need 

  2. Incorporate and register your business 

  3. Apply for a tax ID

  4. Open business bank account

  5. Apply for insurance and bonding

Carpet Cleaning Franchise Opportunities: Worth it?

The legal requirements can be daunting for folks who want to start a new business. This is one of the reasons people look into franchises instead of doing everything on their own. Opting for a franchise enables you to tap into a brand and business model that already works. They offer franchisee training, and you can skip out on the difficult and tough stages of starting a business.

But with franchises, there are always pros and cons:

ProsCons
Higher success rate compared to businesses that started aloneHigher upfront investment fee
Proven business modelPotential ongoing royalties
Quick and easy to launchAllocation to a specific geographic territory
Receive discounts on equipmentDifficult to grow and expand
Can leverage brand image and recognitionLess independence and freedom
Existing branding helps with customer acquisition
Gain training and support from headquarters

If you’re considering the franchise route, make sure you assess the different franchises available. Talk to existing and previous franchisees to understand what it’s like to be a franchisee yourself.

The Technical Stuff: Carpet Cleaning Scheduling, Invoicing, Payment & Quickbooks

Much of the technical aspects of running a carpet cleaning business might be new to you, as well. To help out, we’ve outlined the types of tools you’ll need to get started and some of the exact brands that our pros regularly talk about and use.

Steps

  1. Set up a website and social media profiles

  2. Shop for and invest in tech platforms (see chart)

  3. Create calls-to-action (CTAs) on your website and social media profiles

Tech Platforms Our Pros Use

Tools to ConsiderPurposeExamples Our Pros Use
WebsiteOnline booking, represent your brand, educate customers on your services, service area, contact infoHousecall Pro Website Builder
Social Media ManagementSchedule and automatically send posts; respond to messages across social media platforms in one placeHootsuite Recurpost eClincher ZohoSocial
Email Marketing ManagerManage email campaignsMailchimp ActiveCampaign
Customer Relationship ManagementTrack Customer Leads, maintain detailed customer historiesInsightly amoCRM Pipedrive Zoho
Field Service ManagementScheduling, job management, invoicing and payment processingHousecall Pro
Payroll ManagementManage employee paychecks, expenses, and taxesPaychex Quickbooks ADP Square Payroll

Additional Resources From Our Blog

Carpet Cleaning Equipment 

You likely have most of the professional tools and equipment you need to get started. Below, we've listed the steps and other items (like uniforms) that are useful for every carpet cleaning business.

Steps

  1. Assess and fill equipment inventory

  2. Rent office front and/or warehouse space (if needed)

  3. Invest in a service van or truck

Comparing Equipment

Especially if you’re just starting out in this industry, you’re about to make a very large investment in equipment that needs to last and do a good job. So how do you know what’s the best brand? Ask other pros.

We’ve listed a bunch of Facebook groups in the “Where to Go From Here” section at the end of this guide. Join up and search the group for reviews or conversations around different equipment.

On top of operational equipment, you can also explore uniforms. Having a uniform for your business can make you appear more professional and trustworthy. If you’re a one-person shop, you can order one with your logo. It’s not too expensive and can add a lot of value to your brand! 

Additional Resources From Our Blog

Pump PSI Comparison

Positioning Yourself in The Market 

When you’re selling to everyone, you’re selling to no one. When it comes to positioning yourself in the market, you need to know who your ideal customer is, and consider specializing.

Steps

  1. Outline your target market and ideal customer

  2. Decide if you want to specialize

  3. Update your brand messaging and service offerings accordingly

Choosing Your Market 

Most carpet cleaning companies target homeowners and small commercial businesses, such as medical groups, realtors, or even hotels and schools. 

But there are other markets to consider, such as high-end homeowners who might have carpets and rugs that require specialized equipment and care, or property managers who will need consistent services over many properties. 

You don’t need to choose just one market, but whoever you choose, you’ll want to make sure your website and marketing materials speak directly to them.

Should You Start with Residential or Commercial or Both?

MIlton recommends starting with both. “I don't think you can pigeon hole yourself to be one or the other. Especially starting out, you want to have as much coming in as you possibly can. You need the money to grow from where you are.”

If you’re looking to attract both audiences, however, you need specific language on your website and unique marketing efforts for each. 

As Mike Campion explains on his Grow My Cleaning Company Podcast, “You need the right bait for the right fish.” He uses the example of a company targeting young professionals who own condos. The bait would be “more time for fun, more time to be with your friends and live your life.” But that message wouldn’t work for commercial customers that have different priorities. 

Choosing Your Specialty

You don’t need to specialize. You can run a successful carpet cleaning business by simply offering great, professional services. But sometimes it helps to stand out — especially in oversaturated markets.

There are many ways to do this. For example, you can specialize by serving a niche audience. You can also offer specialized services or carpet cleaning techniques. Some examples:

A benefit of specializing: “The clearer you are in exactly what you do and who the perfect customer is, the better your referrals can be,” Campion explained in that same podcast.

Following Industry Changes

According to industry reports, carpet and floor rugs continue to lose their market dominance. Hard flooring, such as tile and hardwoods, remain on the rise. These trends are important to follow as you position yourself: your brand and your services. 

Consider, for instance, how the name of your company, your website, and your logo impact how you position yourself in the market. If everything is focused around carpet, but you’d like to become more focused on tile cleaning, it might require a major rebranding.

Carpet Cleaning Services and Pricing 

Many of our pros charge some of the highest rates in their area because they know that they offer an amazing customer experience, as well as premium services. You’ll know you’ve found your sweet spot when you’re attracting your ideal customer and meeting your revenue goals.

Steps

  1. Create a list of services you’re able or interested in offering

  2. Create a price list for all of your services

  3. Create a contract template

  4. Write up a terms and conditions document

Pricing Your Services

Square Foot or Flat Rates?

Carpet cleaners have strong opinions about whether to charge per square foot or charge a flat rate per area. Ultimately you’ll want to go with the pricing structure that makes the most sense for you. But we do see more pros switching to a flat rate. Customers often appreciate the flat rate structure because there’s no surprises. The price you see is the price you get.

If you choose to go with flat rate pricing, here are some tips to making it work well:

  • Price above your average square foot area: When pricing per area, figure out what the average square footage is of rooms that you service, and make sure you’re pricing above what you would if you were charging per square foot. 

  • You can charge extra for things: Make it explicit what the flat rate includes and what it doesn’t. For instance, many pros charge extra for stairs, pet odor treatment, stain removal services, and carpet protector treatments.

  • Residential and Commercial Pricing Structures Can Vary: Some businesses will charge a flat rate for residential and square foot for commercial. The reason is because commercial properties don’t always have their spaces mapped out into rooms the same way a house does, but they’re more likely to know how many square feet they need total. 

Create Recurring Service Plans

Increase the lifetime value of each client with recurring service plans, also known as service maintenance agreements. When you offer amenities such as discounted rates or upgraded services in exchange for an ongoing service agreement, both you and the customer wins.

Additional Resources From Our Blog

How to sell recurring service agreements

Carpet Cleaning Marketing: How to Get Leads 

If you don’t have an existing customer base, positive reviews, or presence in your local community yet, those initial leads are hard to come by. But before you spend tons of money on advertising, we recommend building up your online presence and in-person networking. These strategies can save you money in the long-run and help you find organic leads.

Steps

  1. Create a marketing plan

  2. Design business cards, car or van wrap, and other marketing materials

  3. Sign up for Google My Business

  4. Claim your business on other lead generation platforms

  5. Optimize your website for search engines (SEO)

  6. Join digital and in-person networking groups

Case Study: Building a Brand via Referrals

Since Harvey started his business nineteen years ago, he has advertised in various ways. He’s currently building out reviews and has gotten business through his website and through different forms of advertising. But the most successful way he’s found clients throughout the years has been through Business Networking International (BNI). The organization is designed to foster referrals between members.

“I had my application in to BNI before my equipment arrived. I very quickly saw that's how you go after the premium dollar … And it opens up doors much quicker than advertising,” Harvey said. 

Harvey believes that he’s been able to charge higher prices because so much of his business comes from referrals. “When it's a referral, people understand that they're getting premium work. I’ve been in million dollar houses whose owners I’ve never met because their sister-in-law recommended me.”

He also credits his success to focusing on relationship building.

Try Multiple Strategies At Once

“You always need to have at least two marketing media that are working very well for you. I recommend that you have your hand in at least three. Where does it get to where it’s too many? Maybe five,” explained John Braun on the Cleaners Blueprint Podcast. John is the founder of Premium Carpet Care and Hitman Advertising, an advertising consulting group that caters to cleaning companies.

The media John was referring to could be Facebook, Google Ads, signs in your customer’s yards and so on. At any given point, you should be trying new things, as well as promoting your business in a way that’s tried and true.

Mighty Green’s Marketing History

When his business was just getting started, Milton got a call from a sales agent at yp.com (the Yellow Pages online) who convinced Milton to sign a monthly contract for $700 a month.

“That was one of the pitfalls of it all. You don't know what to do when you first get into business. I'm a technician by trade, so as far as a business owner, I know I need to get the phone ringing — how do I do that? This guy caught me basically at the right time where it was like, Hey, your business is going to be so huge if you use our company and we're going to sell you the premium package, which, which gave me absolutely no business within the first 30 days of actually using them.”

After that, Milton and Julie relied on referrals and word-of-mouth for a while until he invested in social media marketing. Now, the vast majority of his new business leads comes from Facebook.

  • They post every day with a mix of educational and sales-oriented content.

  • They share their content to local Facebook groups where the engagement is highest.

  • They maintain a small budget for Facebook ads.

Milton strong recommends getting involved with local Facebook groups. “The algorithms, when they changed, we could see a drastic drop in interaction. Like it went from one to two thousand people saw and interacted with your post to a hundred people and that's it.”

Customer Retention Ideas

To retain customers, we recommend you provide:

  1. Helpful Reminders: You can offer customers fridge magnets with useful information like emergency phone numbers, or a yearly calendar, with your business name and logo. That way, if they need a carpet cleaner, they’ll know who to call.

  2. Incentives for Service Agreements: You can provide discounts, additional perks, and guarantees, to convince your existing clients to enter a recurring service agreement. 

  3. Follow Up Messages: Haven’t heard from them in a while? Follow up with an email or a postcard to remind them of your business. 

Additional Resources From Our Blog

Carpet Cleaning Hiring: Your Path to Growth

Many carpet cleaning businesses start and stay as a one or two-person team. But if you’re keen to grow your business, you’ll need to hire on a few extra pairs of hands. Here’s some tips about when and how to hire.

Steps

  1. Assess the numbers (what can you afford?)

  2. Research the legal requirements (federal, state, and local) of hiring someone

  3. Outline the hiring and onboarding processes

  4. Set up functions to handle salary and benefits

  5. Create job listing ad

Do You Need to Hire?

Before he … Went in with goals to expand and add trucks. “What made me happy this year and what made me miserable in the fortune 500 job?” Managing so many people. “I was making a good living and all the things I needed, so I decided to reorganize myself under the paradigm of one truck.”

Million Dollar Myth built a million dollar business with one truck

Are You Ready?

How do you know if you’re financially capable?

Here’s a general rule of thumb: you should only consider hiring an employee if...

  1. They will make money for your business

  2. They will save money for your business

Questions you can ask include:

  • Do I have so much work that I can’t handle it all myself?

  • Am I working too much in the business, that I have no time to work on the business?

If you answered yes to any of these questions, then you may need to consider hiring. 

When it comes to financial capability, we recommend having extra cash flow. You will not be able to make a profit from the first employee right away, as they need time to learn how your business’ systems and procedures. 

If you’re still undecided, you can hire a contractor instead. While you’re paying more per hour, you’re not locked into paying a salary. If your business grows and the contractor does well, you can transition the contract into full-time.

Additional Resources From Our Blog

Where to Go From Here

Even if you know the industry well, it can take a few years to establish your company, develop best practices, build a reputation, and gain a consistent customer base. Just keep at it, and you can create a successful business that returns six figures.

But you don’t need to do this alone. 

Check out our local meetups and full day Mastermind events to network and learn from other service businesses.

Also consider joining other trade organizations: 

And these Facebook Groups:

For general business resources, we recommend:

And check out a longer list of small business associations.

Finally, don’t forget to download the ‘How to Start a Carpet Cleaning Business Checklist’ — a summary of all of the steps we went over in this guide.

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