4 Tips for Starting a Carpet Cleaning Business
Carpet cleaning is a challenging business to start-up and gain traction in. You’ll need quality equipment and on-point marketing to stand out from the competition, and the hours can be long, especially in your first couple years as you establish yourself.
Along the way, you’ll be challenged to manage and scale your growing business as you add more personnel and equipment, and make choices about potential vertical integration of additional services your customers want to buy.
Based on the experience of those who’ve had success, here are 4 tips for starting a carpet cleaning business.
1. Taking smart first steps
It’s not as simple as driving around with a vacuum in your trunk. Contact someone who has a carpet cleaning business in your area ask to ride around with them for a day to get a feel for things. You can also look into getting certified through the IICRC, or enroll online at TMF academy, where you can get set-up with everything from basic courses to deals on equipment and chemicals, and support for marketing.
Every business needs startup capital and carpet cleaning is no different. You will need money for equipment, gas, chemicals and marketing, at the minimum. Figure out what you need to live on top of that, and try to have 90 days expenses in reserve to give you time to establish regular cash flow.
2. Procuring the essential equipment
Equipment comes at all price levels. You can start out with lower end equipment to help manage risk early-on, just be aware that this will limit the types of jobs you can do, as well as the quality of the work you can deliver. Ed Valentine of Cross-American Corp. is a wealth of information on this subject via the carpet cleaning industry’s Truck Mount Forum. His simple advice? “When looking for used equipment, ask yourself: ‘Is it used; or, is it used up?’ Making the wrong decision here could cost you bundles.”
A top of the line portable unit, such as the Nautilus 1200PSI, goes for about USD$4,200 including a set of hoses. That said, you can pick up something older and smaller on eBay starting around a few hundred dollars, or splurge for a ready-to-go van with a truck mounted carpet cleaning unit for USD$10,000 or more. If these prices seem like a barrier to entry, check out Interlink Financial and others who lease equipment on a monthly plan.
If leasing isn’t an option, you can always rent from your local Home Depot, but there’s no guarantee they’ll have equipment available from day to day.
3. Getting your first customers
In the early days, you need to be a marketing company that’s good at carpet cleaning. Remember, carpet cleaning is not an ‘everyday’ service. Most people will only get their carpets cleaned once or twice a year. So, if you want to get by in the residential market, you’ll need to build up a good book of repeat business to make the kind of money you want to. This brings up a great point: every market has a niche someone else doesn’t want to work. Find that niche in your region and claim it.
Flyers, word of mouth and traditional advertising can all be effective, but digital methods, such as Facebook and Google, probably offer the most bang for your marketing buck once you get them dialed-in. Once you’ve got some traction and are thinking about how to grow your business, there are four basic strategies to consider:
- Selling supporting products, like a pet stain sanitizer, to your customers;
- Adding more services, like window cleaning or lawn care;
- Covering a broader geographic area; and/or
- Incenting your customer base for referrals.
Many carpet cleaners will look to partner with traditional home cleaning services, or realtors with houses to show, as a means to discover and close more work opportunities. If you want to target property managers specifically, watch this great video from Methodclean on how to sell to that market.
4. Managing for profitability
Like every business, you need a reliable, trackable system for quoting and invoicing, managing jobs, allocating labour and materials, collecting payments and paying taxes, etc. You also want to establish an easy, efficient way to communicate with customers, and encourage them to share their satisfaction with their peers.
Once you’re setup with the right equipment and have a reliable book of business, you can expect pretty fair profit margins. Many members of the Truck Mount Forum report margins of 40% or better but that can very greatly, and just lowering your prices to get more work isn’t always smart. Scott W from Interlink Supply provides this excellent illustrative example:
Based on doing 10 jobs a week for $200 each, producing $2,000 in gross income, if:
Variable expenses are $30 per job = $300
Fixed expenses are $300 per week = $300
TOTAL EXPENSE for the week = $600
NET PROFIT FOR THE WEEK = $1,400
If prices are 20% lower ($160) and you get 30% more work, (13 jobs), producing $2,080:
Variable expenses are $30 per job = $390
Fixed expenses are $300 per week = $300
TOTAL EXPENSE for the week = $690
NET PROFIT FOR THE WEEK = $1390
In other words, you just did 30% more work for less profit.
To avoid falling into simplistic traps like undercutting yourself, consider using a simple mobile app like Jobber that helps you track relative costs associated with jobs (including chemicals, gas, labor etc.). Jobber’s time tracking feature also allows you to track actual time spent at a job, so you can ensure you’re quoting accurately—and making the most profit possible.