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Do you want to start janitorial services?
Are you looking for how to open a janitorial cleaning service? Well, janitorial services are basically commercial cleaning and maintenance services – which can be availed on an everyday basis as well as on a monthly and yearly basis according to the work nature.
The biggest reason behind the popularity of janitorial cleaning companies is that the business is extremely easy and cost-effective to start. Yet it promises considerable profits.
However, despite the simple startup, you still need to prepare a business plan for janitorial services before starting it. To help you in developing an accurate business plan, we are providing a sample plan of a startup, Cleaning Masters.
Executive Summary
2.1 The Business
Cleaning Masters will be a licensed and registered janitorial business start up based in New York. The business will provide day-to-day cleaning services to commercial buildings, medical facilities, educational institutes, and construction companies. Moreover, the company will also offer grand maintenance services that are not required one to two times a year.
2.2 Management of Janitorial Services
As janitorial services are required on a regular as well as an urgent basis, it is essential to have a proper plan for running your business. In your business plan, you must list the staff, equipment, and hardware support through which you’ll be able to manage your business.
In this business plan on how to start a janitorial business we’ll be providing all the details of Cleaning Masters so you can have an idea of business operations.
2.3 Customers of Janitorial Services
Before you think about how to start a janitorial cleaning company you should decide which segment of society you will be serving. It will enable you in devising customer-friendly policies as well as in acquiring the right equipment to perform the tasks.
2.4 Business Target
Our business aims at becoming the most renowned janitorial business in entire New York within five years of our launch. And to increase our staff and sales by 50% after four years of our launch. Moreover, we have also defined our financial targets that are demonstrated in the following graph.
Company Summary
3.1 Company Owner
Cleaning Masters will be owned by Jack Gibson. Jack had been associated with the cleaning industry for nearly four years. He has served in several managerial positions but has decided to start his own business now.
3.2 Why the janitorial services are being started
Jack wanted to start a business to get recognized in the business world. He had experience in the cleaning profession. And he had several new ideas to run a cleaning business in a different and better way. Therefore, keeping in view his interest, he started a janitorial business.
3.3 How the janitorial services will be started
Step1: Draft a description cleaning services business
Before starting a janitorial business you should write a business plan. You can either get your business plan written by some professional business consultants or you can write it yourself if you possess the required skillset.
To give you an idea of how your business plan should look like, we’re providing a sample business plan for janitorial services. In this janitorial services business plan example we are basically providing the business plan made for Cleaning Masters.
Step2: Registration and licensing
After making a business plan, make sure to get your business registered. Moreover, look for the licenses and permits you’ll need to run your business.
Step3: Set up your business
The next step is to rent or lease a large space to convert it into your office and also to keep your equipment and machinery.
Jack decided to set up his office in a building that was previously used by a construction company. He purchased the following machinery in bulk to ensure that the business operations run smoothly.
- Automatic cleaning equipment
- Floor cleaning machines
- Carpet extractors
- Carpet and floor sweepers
- Pressure washers
- Steam and vacuum cleaners
- Grout and tiles cleaning machinery
- Disinfecting applicators and liquids
- Brushes, pipes, buckets, microfiber cloths, protective kits, and other general items.
Step4: Promote, market, establish a strong web presence
Along with other preparations, you should start marketing and promoting your services. To get introduced to a larger population it is essential to also establish a strong social media and website presence.
| Start-up Expenses | |
| Legal | $250,000 |
| Consultants | $0 |
| Insurance | $31,000 |
| Rent | $25,000 |
| Research and Development | $27,000 |
| Expensed Equipment | $56,000 |
| Signs | $4,000 |
| TOTAL START-UP EXPENSES | $393,000 |
| Start-up Assets | $320,000 |
| Cash Required | $328,000 |
| Start-up Inventory | $53,000 |
| Other Current Assets | $201,000 |
| Long-term Assets | $226,000 |
| TOTAL ASSETS | $1,128,000 |
| Total Requirements | $1,521,000 |
| START-UP FUNDING | |
| Start-up Expenses to Fund | $393,000 |
| Start-up Assets to Fund | $1,128,000 |
| TOTAL FUNDING REQUIRED | $1,521,000 |
| Assets | |
| Non-cash Assets from Start-up | $1,501,000 |
| Cash Requirements from Start-up | $362,000 |
| Additional Cash Raised | $52,000 |
| Cash Balance on Starting Date | $32,000 |
| TOTAL ASSETS | $1,947,000 |
| Liabilities and Capital | |
| Liabilities | $29,000 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $41,000 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $70,000 |
| Capital | |
| Planned Investment | $1,521,000 |
| Investor 1 | $0 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $1,521,000 |
| Loss at Start-up (Start-up Expenses) | $356,000 |
| TOTAL CAPITAL | $1,877,000 |
| TOTAL CAPITAL AND LIABILITIES | $1,947,000 |
| Total Funding | $1,521,000 |
Services
Owning a cleaning franchise or your own cleaning facility gives you the freedom to introduce newer ways in the cleaning domain. Jack had several ideas to innovate cleaning processes with the help of technology. The services he decided to offer to implement his ideas are listed in this business plan template for a janitorial service.
- Interior Building Cleaning and Maintenance
This service will include cleaning everything inside commercial buildings such as offices, educational institutes, etc. By everything, we mean all the curtains, furniture, floor, walls, staircases, washrooms, windows, and doors. Our offerings in this area will include
- Floor Cleaning & Restoration
- Window Washing
- Wall & Wallpaper Cleaning
- Carpet Cleaning
- Furniture Cleaning
- Furniture Polishing
- Pressure Washing
We also offer pressure washing services to clean hard surfaces, passageways, decks, and outdoor floors.
- Construction Site Cleaning
We will provide regular clean up services during the construction projects. That will also include removal of debris, mud, dust, adhesives, and other leftover substances after construction completion.
- Hospital Cleaning: We have specialized staff and equipment to provide cleaning services to hospitals and healthcare facilities. We have the equipment and skills to disinfect and clean coronavirus rooms, mortuaries, and general wards.
Marketing Analysis of Janitorial Services
Before you open janitorial business it is essential to carry out a detailed and accurate market analysis. Marketing analysis is required to know your target customers, the prevailing market trends, and previous and forecasted market ups and downs. You can have a general idea of the janitorial business market by reading janitorial business plans available on the web. However, it is recommended to hire a professional to do accurate marketing analysis for your locality before starting a janitorial service.
5.1 Market Trends
Janitorial services have always been in demand. However, after the prevalence of coronavirus, the need for such services has increased manifold. These days, hospitals, offices, institutes, and corporations seek specialized janitorial services to disinfect their building off and on.
Note
According to IBISWorld, more than 1 million janitiral businesses are running in the United States. Collectively, they share a market size of $64 billion. These businesses are also a source of employment for more than 2 million people. Moreover, in the past five years from 2015 to 2020, this industry has seen a growth rate of 2.1 pc which is expected to increase more over the next five years.
5.2 Marketing Segmentation
Before exploring how to write a business plan for investors, you should draft a list of your customers. This practice will enable you to make important decisions like how many people to hire, what price to set etc.
The target customers of Cleaning Masters belong to the following groups:
5.2.1 Business Offices & Buildings: Our primary customers will be small and large businesses that do not recruit permanent cleaning staff for their facilities. They are expected to avail of our services on daily basis.
5.2.2 Hospitals: Hospitals do contain private cleaning staff. However, due to coronavirus, they need specialized cleaners with proper training to disinfect their wards and mortuaries. Thus, we expect them to avail of our services too.
5.2.3 Construction Companies: Our third primary customers will comprise construction companies that will need us for post-construction cleanup.
5.2.4 Educational Institutes
Small and large education facilities will also avail our services for grand cleaning and restoration for their interior and exterior campuses.
5.2.5 Government Facilities (Museums, Parks)
Lastly, local government bodies are expected to avail of our services at different times for detailed and careful cleaning.
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Business Offices & Buildings | 31% | 38,000 | 40,000 | 43,000 | 44,000 | 45,000 | 10.00% |
| Hospitals | 21% | 24,000 | 26,000 | 28,000 | 29,000 | 30,000 | 10.00% |
| Construction Companies | 19% | 23,000 | 24,000 | 25,000 | 28,000 | 31,000 | |
| Educational Institutes | 15% | 20,000 | 21,000 | 22,000 | 23,000 | 25,000 | 10.00% |
| Government Facilities (Museums, Parks) | 14% | 17,000 | 18,000 | 19,000 | 20,000 | 21,000 | 11.00% |
| Total | 100% | 122,000 | 129,000 | 137,000 | 144,000 | 152,000 | 10% |
5.3 Business Target
Our business targets are:
- To earn a net profit of $28k per month by the end of the three years of our launch
- To increase our staff, sales, and services by 50% by the end of the fourth year of our launch
- To achieve and maintain a CSAT score of above 95% throughout our service years
5.4 Product Pricing
Our prices are more than our competitors because we’re using the latest technologies to do cleaning work. However, we still believe to attract more customers than our competitors due to our quick and high-quality service. And also because of our competitive advantages.
Marketing Strategy
To reach out to your target customers and to compel them to avail of your services, it is essential to have an effective janitorial marketing plan. Through this janitorial business proposal you can learn the competitive advantages and sales strategy that can prove effective.
6.1 Competitive Analysis
We expect to get more customers than our competitors due to the following features.
- We have the latest equipment and automative machines to carry out cleaning tasks efficiently and quickly.
- Our workers are highly collaborative and customer-oriented. We’ll always go the extra mile to assure clients’ satisfaction.
- Our customers can book our services through our website. Moreover, they will also be able to provide their feedback.
- We have developed a management system to keep a record of repeat customers so they can be given certain discounts and benefits.
6.2 Sales Strategy
- We’ll advertise our startup through Google Local ads service and local magazines.
- We’ll ensure to come in Google top searches by making our website search engine optimized.
- We’ll offer a 40% discount on all of our services for the first two months of our launch.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Interior Building Cleaning/ Maintenance | 43,000 | 45,580 | 48,315 |
| Pressure Washing | 37,000 | 39,220 | 41,573 |
| Construction Site Cleaning | 36,000 | 38,160 | 40,450 |
| Hospital Cleaning | 38,000 | 40,280 | 42,697 |
| TOTAL UNIT SALES | 154,000 | 163,240 | 173,034 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Interior Building Cleaning/ Maintenance | $51.00 | $59.16 | $68.63 |
| Pressure Washing | $38.00 | $44.08 | $51.13 |
| Construction Site Cleaning | $44.00 | $51.04 | $59.21 |
| Hospital Cleaning | $47.00 | $54.52 | $63.24 |
| Sales | |||
| Interior Building Cleaning/ Maintenance | $2,193,000.00 | $2,696,512.80 | $3,315,632.14 |
| Pressure Washing | $1,406,000.00 | $1,728,817.60 | $2,125,754.12 |
| Construction Site Cleaning | $1,584,000.00 | $1,947,686.40 | $2,394,875.20 |
| Hospital Cleaning | $1,786,000.00 | $2,196,065.60 | $2,700,282.26 |
| TOTAL SALES | $6,969,000.00 | $8,569,082.40 | $10,536,543.72 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Interior Building Cleaning/ Maintenance | $48.00 | $55.00 | $64.00 |
| Pressure Washing | $34.00 | $40.00 | $47.00 |
| Construction Site Cleaning | $42.00 | $47.00 | $53.50 |
| Hospital Cleaning | $45.00 | $51.00 | $58.50 |
| Direct Cost of Sales | |||
| Interior Building Cleaning/ Maintenance | $2,064,000.00 | $2,506,900.00 | $3,092,147.20 |
| Pressure Washing | $1,258,000.00 | $1,568,800.00 | $1,953,940.40 |
| Construction Site Cleaning | $1,512,000.00 | $1,793,520.00 | $2,164,053.60 |
| Hospital Cleaning | $1,710,000.00 | $2,054,280.00 | $2,497,762.80 |
| Subtotal Direct Cost of Sales | $6,544,000.00 | $7,923,500.00 | $9,707,904.00 |
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Personnel plan
Janitorial business requires the owner to hire adequate staff. So that there are enough people to take cleaning projects even when some employees are already engaged. While writing a business plan for janitorial services Jack prepared a list of required employees, which we’re providing here.
7.1 Company Staff
- 1 Supervisor to monitor large cleaning projects
- 1 Accountant to maintain financial records
- 2 Technicians to maintain the machinery
- 1 Software/ Web Developer to manage software tools & websites
- 12 Janitors & Healthcare Cleaners
- 1 Sales Executive to establish a relationship with customers
- 2 Drivers to provide transport
- 1 Receptionist/ Call operator
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Supervisor | $13,000 | $14,300 | $15,730 |
| Accountant | $11,000 | $12,100 | $13,310 |
| Technicians | $20,000 | $22,000 | $24,200 |
| Software/ Web Developer | $10,000 | $11,000 | $12,100 |
| Janitors & Healthcare Cleaners | $100,000 | $110,000 | $121,000 |
| Sales Executives | $9,000 | $9,900 | $10,890 |
| Drivers | $16,000 | $17,600 | $19,360 |
| Receptionist/ Call Operator | $7,000 | $7,700 | $8,470 |
| Total Salaries | $186,000 | $204,600 | $225,060 |
Financial Plan
Business plan for investors
One good thing about the janitorial business is that it doesn’t require you to spend huge amounts on startup. The main costs involved in starting a janitorial business are purchasing high-quality machinery and tools and providing specialized training to your employees. Besides, the business has other financial operations going along – such as marketing and advertisement, employee’s salaries, startup expenses, rent, and more.
To manage all the financial activities, it is essential to have a detailed and accurate financial plan. Jack hired a professional financial advisor to plan out things for him. It is recommended for you to do the same. However, if you need a rough idea of the costs involved in this business, you can have it from this starting a janitorial service business plan.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.16% | 8.25% | 8.28% |
| Long-term Interest Rate | 8.33% | 8.38% | 8.40% |
| Tax Rate | 23.90% | 24.20% | 25.02% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
| Brake-Even Analysis | |
| Monthly Units Break-even | 5340 |
| Monthly Revenue Break-even | $131,000 |
| Assumptions: | |
| Average Per-Unit Revenue | $231.00 |
| Average Per-Unit Variable Cost | $0.61 |
| Estimated Monthly Fixed Cost | $170,200 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $6,969,000 | $8,569,082 | $10,536,544 |
| Direct Cost of Sales | $6,544,000 | $7,923,500 | $9,707,904 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $6,544,000 | $7,923,500 | $9,707,904 |
| Gross Margin | $425,000 | $645,582 | $828,640 |
| Gross Margin % | 6.10% | 7.53% | 7.86% |
| Expenses | |||
| Payroll | $186,000 | $204,600 | $225,060 |
| Sales and Marketing and Other Expenses | $130,000 | $134,000 | $139,000 |
| Depreciation | $2,240 | $2,300 | $2,410 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $2,700 | $2,800 | $2,900 |
| Insurance | $2,000 | $2,000 | $2,050 |
| Rent | $2,800 | $2,900 | $3,000 |
| Payroll Taxes | $29,000 | $30,000 | $31,000 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $354,740 | $378,600 | $405,420 |
| Profit Before Interest and Taxes | $70,260 | $266,982 | $423,220 |
| EBITDA | $70,260 | $266,982 | $423,220 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $14,052 | $53,396 | $84,644 |
| Net Profit | $56,208 | $213,586 | $338,576 |
| Net Profit/Sales | 0.81% | 2.49% | 3.21% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $54,000 | $58,320 | $62,986 |
| Cash from Receivables | $18,000 | $19,440 | $20,995 |
| SUBTOTAL CASH FROM OPERATIONS | $72,000 | $78,480 | $84,758 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $73,000 | $79,000 | $85,000 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $34,000 | $34,500 | $35,000 |
| Bill Payments | $16,000 | $17,000 | $18,000 |
| SUBTOTAL SPENT ON OPERATIONS | $50,000 | $51,000 | $53,000 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $52,000 | $56,160 | $60,653 |
| Net Cash Flow | $12,100 | $14,000 | $16,000 |
| Cash Balance | $23,000 | $25,000 | $26,000 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $262,000 | $293,440 | $322,784 |
| Accounts Receivable | $23,000 | $25,760 | $28,954 |
| Inventory | $4,000 | $4,480 | $4,900 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $268,000 | $300,160 | $337,380 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $19,000 | $21,280 | $23,940 |
| TOTAL LONG-TERM ASSETS | $23,000 | $25,760 | $28,980 |
| TOTAL ASSETS | $275,000 | $308,000 | $346,500 |
| Liabilities and Capital | Year 4 | Year 5 | Year 6 |
| Current Liabilities | |||
| Accounts Payable | $18,800 | $21,056 | $23,667 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $15,400 | $17,248 | $19,387 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $14,900 | $16,688 | $18,757 |
| Paid-in Capital | $30,000 | $30,000 | $31,000 |
| Retained Earnings | $53,200 | $57,988 | $63,787 |
| Earnings | $191,200 | $208,408 | $229,249 |
| TOTAL CAPITAL | $274,300 | $298,987 | $328,886 |
| TOTAL LIABILITIES AND CAPITAL | $289,200 | $308,000 | $346,500 |
| Net Worth | $278,000 | $303,020 | $333,322 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 7.25% | 8.03% | 8.90% | 3.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 9.18% | 10.17% | 11.27% | 9.80% |
| Inventory | 5.40% | 5.98% | 6.63% | 9.90% |
| Other Current Assets | 2.14% | 2.37% | 2.63% | 2.40% |
| Total Current Assets | 150.01% | 151.00% | 152.00% | 158.00% |
| Long-term Assets | 11.34% | 11.39% | 11.49% | 12.00% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.93% | 4.97% | 5.02% | 4.34% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 0.00% |
| Total Liabilities | 7.61% | 7.67% | 7.74% | 7.38% |
| NET WORTH | 100.99% | 101.80% | 102.73% | 110.00% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.92% | 97.48% | 100.21% | 99.00% |
| Selling, General & Administrative Expenses | 94.45% | 97.00% | 99.72% | 97.80% |
| Advertising Expenses | 1.55% | 1.59% | 1.64% | 1.40% |
| Profit Before Interest and Taxes | 41.70% | 42.83% | 44.03% | 33.90% |
| Main Ratios | ||||
| Current | 33 | 34 | 36 | 32 |
| Quick | 33 | 34.2 | 35.055 | 33 |
| Total Debt to Total Assets | 0.17% | 0.17% | 0.16% | 0.40% |
| Pre-tax Return on Net Worth | 73.58% | 74.11% | 74.85% | 75.00% |
| Pre-tax Return on Assets | 95.20% | 99.96% | 104.96% | 111.30% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 33.50% | 34.54% | 35.61% | N.A. |
| Return on Equity | 55.30% | 57.01% | 58.78% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 7.7 | 7.7 | 7.8 | N.A. |
| Collection Days | 100 | 100 | 100 | N.A. |
| Inventory Turnover | 32.1 | 33.705 | 34.1 | N.A. |
| Accounts Payable Turnover | 15.4 | 16.1 | 16.8 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 2.4 | 2.5 | 2.6 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | -0.04 | -0.03 | -0.03 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $235,000 | $248,160 | $262,057 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.85 | 0.86 | 0.87 | N.A. |
| Current Debt/Total Assets | 1% | 0% | 0% | N.A. |
| Acid Test | 28 | 28.6 | 29.3 | N.A. |
| Sales/Net Worth | 2.1 | 2.3 | 2.3 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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