If you’re debating starting a cleaning business, then you’ll need to gather materials and cleaning supplies before you can get started. But how do you go about doing so? You’ll need some sort of starting capital to get started! This starting fund could come in the form of savings, or applying for a loan.
To get funding for a cleaning business you will need to take out a business loan or use your personal savings. Each option has its pros and cons and can affect your new business differently in the long run.
Let’s dive right in and get started dissecting the pros and cons of each of these options. By the end of this article, you will have a much better understanding of what each of the options entails and which is the right fit for your new business.
Taking out a Loan
Let’s start with taking out a loan in order to get your business started. There are many different loans out there that you can apply for in order to start your business. Choose one that best suits your business’s needs.
Ask yourself a few questions before getting started – questions such as how big or small do you want your cleaning business to be? Do you want your business to have a large team, or will it be just you? Will you be starting out with a large array of cleaning supplies and tools or just the basics? Will you need a space to run your business out of or will you be operating out of your home or vehicle?
All of these questions will determine how big of a loan you need take out and thus give you an idea of which loan with which terms you should apply for. Answering all of these questions (and other necessary ones) will also give you a good start for your business plan.
A business plan is important for getting started and is key to getting your business loan approved. Loan lenders want to see that the individual they are giving money out to has a plan to get their new business off the ground and grow it. They want some sort of assurance that the money they lent out will be paid back to them in time, and that you have a way to do so. So, make sure you are taking the time to write a sound business plan.
The biggest pro of using a loan to pay for your new cleaning business is that you won’t have to worry about touching your savings instead. This means that in the case that your new business doesn’t take off immediately, you have savings to fall back on to pay for rent and other monthly expenses. On the flipside of this however, is the fact that you are now going into debt in order to open up your business, and you need to stay on top of your monthly loan payments.
Be sure to weigh both sides of this option before determining if you want to take out a loan in to start your new business. Remember, once you take out a loan, it is yours until you pay it back. Also, be sure to check if the loan you are applying for has late fees, early pay off fees, application fees, and what all else is included with it. You don’t want to enter into a contract blindly only to find out later it has all sorts of hidden fees you weren’t aware of going into it.
Business loans, unlike other loans, may have additional requirements and fees associated with it. So, not to sound like a broken record, but really do your research and shop around to make sure you find the loan that is right for you.
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Starting Your Business with Savings
If you don’t like the idea of going into debt in order to start a business, then don’t sweat it. You have another option. You could dip into your savings and use that as a starting investment instead. You don’t have to use up your entire savings, just enough to get you started with the necessities. If you divide your savings up properly, you can ensure that you have enough to start your business, and money left over to fall back on in the future.
Getting into the cleaning industry has relatively low startup costs, and you can get started with the bare minimum and with just a couple hundred dollars. Simply purchase the basic cleaning supplies, have a plan on how you will get to each location with your supplies and get started! You don’t need to rent out a fancy space or buy the top-of-the-line vacuum cleaner to get your business started. You could even use the cleaning supplies already in your possession (such as the vacuum you already own) if that makes the most financial sense.
You don’t have to stay this small scale forever. You can always build onto your business as time goes on. Add services and tools as the demand for them arises, and keep on growing. There is no need to invest in everything up front when money may be tight, and there is nothing stopping you from adding on services as you grow.
Taking into account the low startup costs of starting a cleaning business, using savings to get started vs taking out a loan could save you money in the long run. This means more of the money that you make off your services are pure profit, vs money that you have to put towards paying back your loan. Keep this in mind when you are deciding between taking out a loan or using savings to open up your shop.
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Check out the Small Business Administration for Advice
If you have questions on how to get started, which you likely will, then check out the website for the small business administration. They are a great resource for anyone who is just getting a new business started. They can help answer questions on what loan options are available to you, and help you determine which option is best taking into account your financial standing and situation. They can also set you up with a business mentor who will work with you and give you personalized advice on getting funding for your business, and just in general help you get set up. They’ve been exactly where you are, so they understand what questions you may have!
The SBA also has loans of their own that they offer to small businesses as well as grant money that they provide. You can see if you qualify for the grant money they offer. Grant money is great, in the sense that unlike loans, you don’t have to pay grant money back! It’s yours to keep and spend as you see fit on your business. There are limited funds to go around however, and the competition to qualify for it will be high.
Check out their website here sba.gov and see just how they can be of help to you!
Deciding What is Best for Your Business
At the end of the day, all I can do is lay out the pros and cons of taking out a loan vs using savings. Ultimately, it is up to you to decide what is best for your business and your life. Both options have things that are very alluring about them, and drawbacks, but it is up to you to figure out what you can live with and what is a deal breaker. Before you rush in and choose either, do your research, write out your business plan, and make a logical decision.
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Frequently Asked Questions
- What is the range in cost of starting a cleaning business?
On the lower end, I would say you could get a cleaning business started (with the bare necessities) for around $500. But on the higher end, you could easily invest in fancy equipment, a fancy truck to drive you around, a large team of workers and spend hundreds of dollars in marketing for your new business. The sky really is the limit if you have a ton of money available to you and want to spend it.
- If I am starting with just $500, what are the absolute necessities I should invest in?
I would for sure invest in a decent vacuum cleaner, (if you are being hired to clean a house, this is likely a huge part of your services) some dusters, a mop (for hardwood floors) and bathroom cleaning tools such as toilet bowl cleaners/brushes and sponges. These should be a good starting point to provide basic cleaning services to guests, and as your business starts to pull in revenue, you can start to add items and service on!
To learn more on how to plan your own clothing brand business click here!
Please note that the contents of this blog are for informational and entertainment purposes only and should not be construed as legal advice. Any action taken based on the information provided in this blog is solely at your own risk. Additionally, all images used in this blog are generated under the CC0 license of Creative Commons, which means they are free to use for any purpose without attribution.
About the author. A lifetime of Entrepreneurship.
Hi! My name is Shawn and I am a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop (link here http://archives.starbulletin.com/2003/05/18/business/index.html) to an import and export business to an online review business plus a few more and now I create online resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet new business owner, I see myself. I know how hard the struggle is to obtain and retain clients, finding good employees and making sure everything works together all while trying to stay competitive.