How to Start a Carpet Cleaning Business: Everything You Need to Know
If you want to know how to start a carpet cleaning business, you'll just need a business license and sales tax license.3 min read
2. Franchise or Start Your Own Business?
Updated November 5, 2020:
How to Start a Carpet Cleaning Business
If you want to know how to start a carpet cleaning business, you'll just need a business license and sales tax license. This industry has little legal and regulatory red tape, which makes it a good choice for beginning entrepreneurs.
Before launching your carpet cleaning business, make sure you have purchased enough general liability insurance. If you've hired others, you'll also need to carry workers' compensation insurance. This protects you if your employee is injured while working. You can also buy product insurance if your business stocks inventory. You'll need business insurance on the vehicle you're using for work.
Consider setting up a surety bond. This is an escrow account that holds funds to satisfy clients that your business works in good faith. These funds are used to award damages if you are sued by a client. This reassures them that they will be protected if they damage your carpet or don't do the work as paid for.
Once you have these policies in place, and you have the supplies and manpower to clean carpets, you can begin scheduling clients. Most carpet cleaning businesses require about $56,000 to $80,000 in startup costs. This is minimal compared to industries where you need to rent an office, warehouse, or storefront. Startup costs include:
- A new or used van to transport your carpet cleaning equipment
- Professional carpet cleaning equipment, including a portable cleaner with power wand or brush with rotating heads and extractor with attached holding tank. You can also choose a truck-mounted system in which the equipment is attached to long hoses.
- Spot and stain removal kit
- Cleaning solutions and solvents
You might consider legally protecting your intellectual property if you start an independent carpet cleaning business. This prevents others from stealing your business name, logo, business plan, and brand. You can also trademark these elements by applying with the U.S. Patent and Trademark Office. Other legal documents you'll need include:
- Business license
- Business plan
- Certificate of incorporation
- Memorandum of understanding
- Non-disclosure agreement
- Operating agreement
- Employment agreements for any workers you have hired
- LLC agreement if applicable
If you don't need an office space or a vehicle, it's possible to start a carpet cleaning business on a small scale for as little as $10,000. The mid-range cost is around $30,000 if you need to purchase or lease a work vehicle. Those who want to compete in a major market should consider investing around $50,000, which includes the cost of an industrial vehicle, as well as a storefront. Exploring your local market will help you understand how much you must spend to be profitable.
Franchise or Start Your Own Business?
If you prefer a turnkey experience when it comes to starting your carpet cleaning business, you might be a good candidate for a franchise. Fees range from $20,000 to $50,000 and cover training, marketing, and the license to use the branding and logo of your chosen franchise. On top of those costs, you'll need to pay for your office space, inventory costs, and other expenses.
While starting a franchise carpet cleaning business can be expensive, going this route provides you a solid foundation for success. The franchise can help you avoid the most common errors that sink new carpet cleaning businesses.
If you want the freedom of owning your own business, consider opening an independent carpet cleaning agency. This is a good choice if you have the ability to effectively market yourself. You'll need to absorb the cost of mistakes you make since there's no hand-holding like with an established franchise. This may mean that it takes you longer to succeed. However, starting an independent carpet cleaning business is the more cost-effective route, and carries fewer upfront costs. You also don't need to abide by the rules and regulations of a franchise. These can become arduous once you have built a solid, financially successful business. Going it on your own allows you to maintain control and keep most of your profits. In fact, a carpet cleaning company is considered one of the easiest small businesses for new entrepreneurs to operate.
If you need help with the legal documents needed to start your own carpet cleaning business, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.