Residential vs. Commercial Cleaning Services: Which Path Is Right for Your Business in 2024?
Everyone in the cleaning industry has at some point wondered about the key differences between residential and commercial cleaning services. Whether you’re launching your cleaning business or are established and considering expanding your services, stick around as I dive into my experiences with both residential and commercial cleaning.
It’s important to understand choosing between residential and commercial cleaning isn’t just about deciding whether you’d rather clean homes or offices. It’s about aligning your business with your skills, long-term goals, and lifestyle. Think of it like choosing between being a home chef or running a restaurant– both involve similar tasks, but the scale, challenges, and rewards are entirely different.
By the end of this article, you’ll have a much clearer understanding of residential and commercial cleaning, including differences in client relationships, job scope, pricing, and operational demands. This will help you make a more informed decision about which path best fits your business goals.
What’s the Difference Between Residential and Commercial Cleaning?
Commercial cleaning refers to any cleaning that takes place in a building that isn’t a single-family dwelling. Offices, warehouses, industrial facilities, schools, and restaurants all fall under this category. The main focus is keeping the environment clean for employees to remain productive and for customers to feel welcomed. Commercial cleaning typically involves quicker, more frequent maintenance of the space to ensures a consistently clean workspace.
Residential cleaning, on the other hand, is focused on cleaning homes, including single-family houses, apartments units, or individual condos. It’s usually a slower, more detailed process aimed at providing a comfortable and clean living space.
- Clientele: Residential clients are often individuals or families, while commercial clients are business owners or managers.
- Scope: Residential cleaning is typically more personalized and detailed, whereas commercial cleaning focuses on efficiency and maintenance.
- Cleaning Tasks: Residential cleaning often involves deeper cleaning, while commercial cleaning prioritizes regular upkeep.
Next, let’s break down residential and commercial cleaning individually, highlighting key characteristics to give you a clearer idea of which option aligns better with your business.
Residential Cleaning: Is It the Right Fit for You?
Residential cleaning services include deep cleaning, regular housekeeping, and organizing services for homes. The residential market is much larger than commercial cleaning and is often easier to tap into. Everyone know’s someone who lives in a house or apartment, while far fewer have direct connections with business owners.
The shift towards working from home has increased demand for residential cleaning. More people are realizing how quickly messes pile up when you’re spending more time in your house. The residential market is vast, and cleaning jobs typically occur during normal business hours—offering flexibility for those with family commitments like school drop-offs and pickups.
Another benefit of residential cleaning is the opportunity to build long-term relationships with clients. As you clean regularly for families, you may get to know their children, pets, and unique preferences, building strong client loyalty and gaining referrals. Higher hourly rates are also common in residential cleaning compared to commercial services, allowing for better pay as you expand your team.
One of the biggest benefits is residential cleaning offers quicker payment, as you’re dealing directly with homeowners who don’t have the bureaucratic hurdles of commercial clients. However, the cleaning process can be slower, with production rates averaging 400 square feet per hour compared to up to 3,000 square feet per hour in commercial cleaning. You’ll often face bigger messes, pet dander, and dust, making residential cleaning more physically demanding.
While the market is larger, the residential sector comes with challenges such as more schedule variability and frequent cancellations. Seasonal fluctuations can also impact your income. While it’s typically easier to get reviews on the residential side, negative reviews are more likely as homeowners are more vocal when they’re dissatisfied.
Commercial Cleaning: What Does It Entail?
Commercial cleaning involves cleaning offices, retail spaces, and other business environments. Services may include janitorial work, floor care, and window washing. One of the biggest advantages of commercial cleaning is that contracts typically offer consistent work, providing a more stable income stream.
The contracts are larger, and businesses are often better at budgeting for cleaning services than the average homeowner, meaning you’re less likely to deal with cancelations. Additionally, commercial cleaning is usually less physically strenuous, as many commercial spaces are easier to maintain, with higher production rates.
There’s also significant growth potential within the commercial cleaning space, especially if you offer specialized services like floor maintenance or pressure washing. You’ll already have the trust of business owners, making it easier to upsell these services.
However, the barrier to entry in commercial cleaning is higher. Clients often require proof of experience, higher insurance limits, and more advanced equipment. Large contracts may require you to front the cost of supplies and employee wages while waiting up to 90 days for payment. Startup costs for commercial-grade equipment, like pressure washers and floor cleaners, are higher. Additionally, scheduling is stricter, and competition is tougher, especially when going up against larger cleaning companies with advanced systems in place.
How Do the Startup Costs Compare?
On of my favorite things about starting a residential cleaning business is the lower barrier to entry. Many of the supplies and equipment you need can be found in you’re home already, and in some cases, homeowners prefer you to use their cleaning products. Since payment is usually immediate, there’s no need to worry about financing your business’s cash flow.
On the other hand, commercial cleaning requires a larger initial investment. Specialized equipment like floor buffers and carpet extractors are costly, and you may need to purchase higher insurance coverage to land larger contracts. It’s also common to experience delayed payments of up to 90 days, so having capital reserves is essential.
Pro Tip: If you’re unsure whether to start a residential or commercial cleaning business, I suggest first evaluating your budget. We launched Impact Cleaning Professionals with only $2,000. While our goal was to be 100% commercial, in the early years, we took on a lot of residential work to build up the cash reserves needed to support our commercial operations.
In an interview, Michael Wilkins, founder of Wilkins Refresh Cleaning Service, shared that he started his business with just $1,000. Michael initially offered both residential and commercial cleaning services before eventually shifting his focus entirely to commercial cleaning.
What Are the Growth Opportunities in Each Sector?
The residential cleaning market is growing fast, with 10% of U.S. households now using professional cleaning services. This sector employs over 836,000 workers, and its annual revenue has seen a steady increase of about 11%.
On the other hand, the global commercial cleaning market—which includes offices, schools, and industrial spaces—is projected to reach $468.2 billion by 2027. While commercial cleaning has a larger market value globally, residential cleaning has a higher penetration rate among households and is an essential area for business owners to explore.
Scaling a residential cleaning business allows for slower, more manageable growth. You can start with smaller contracts and expand at your own pace. Because residential jobs are smaller in scope, it’s easier to onboard new clients, and your schedule can be more flexible. The downside is that residential cleaning requires more time and effort per client, which could limit how quickly you scale.
In contrast, scaling a commercial cleaning business can lead to rapid growth due to larger contracts and more consistent work. However, you’ll need a solid financial plan to handle the upfront costs of supplies, employee wages, and equipment. Diversifying your services within the commercial sector (such as offering window washing or floor care) can also boost your income, but expect a steeper learning curve and more competition.
Pro Tip: If you want a slower, more manageable growth stick with residential cleaning. You can grow one client at a time rather than trying to fulfill big contracts. If you have the financing in place, and the systems already built out, commercial offers fast growth opportunities.
Can You Offer Both Residential and Commercial Cleaning Services?
Yes, you can offer both residential and commercial cleaning services, but it’s not without its challenges. Your marketing efforts will need to be split, and it can be difficult to target both types of clients effectively. Even your SEO strategy can become confusing, as search engines may struggle to define your primary service.
I had the pleasure of interviewing Anjelika Elwell, the owner of Ace Cleaning & Organizing, who shared her experience running both residential and commercial cleaning operations. Anjelika noted that one of the biggest challenges is getting employees accustomed to switching between the two vastly different cleaning approaches. Staff members often become comfortable with one style, making it difficult to adapt to the contrasting needs of residential and commercial cleaning.
Anjelika did emphasize a significant benefit: managing cash flow. By balancing larger commercial contracts with the steady, immediate income from residential work, her business can maintain financial stability, especially when waiting on net 30 commercial invoices.
Licensing and Insurance Requirements: Residential vs. Commercial Cleaning
When starting a cleaning business, whether residential or commercial, licensing and insurance play a crucial role. However, the requirements differ between these two sectors in terms of complexity, costs, and the level of risk involved.
Conclusion
Choosing between residential and commercial cleaning is a big decision that will shape your business. Each comes with its own set of challenges and rewards, so take some time to think about where your strengths lie and what type of work you enjoy most. By aligning your business with your skills and interests, you’ll set yourself up for success in whichever path you choose.
Who Should Consider Residential Cleaning?
Residential cleaning is ideal for those who enjoy building personal relationships and working in a more flexible environment. If you’re someone who values direct interactions with clients and prefers a more intimate setting, this could be the right fit. It’s also great for those looking to start small with lower initial investments and immediate payment.
Who Should Consider Commercial Cleaning?
On the other hand, commercial cleaning suits those who thrive in structured environments and prefer consistent work schedules. If you’re organized, have a knack for managing larger teams, and enjoy the challenge of contracts, this path might be for you. It often involves higher startup costs, but the potential for stable, recurring revenue can be appealing.
No matter which direction you choose, don’t let uncertainty hold you back. The most important thing is to find customers, start cleaning, and gain real-world experience. This hands-on approach will help you determine what you enjoy most and where your strengths truly lie.
Remember, every successful cleaning business started with a single step—yours could be next! By understanding the differences, weighing the pros and cons, and aligning your services with market needs, you can build a thriving business that meets your goals. Embrace the journey, and let your experiences guide your path forward!
FAQ
- Can I start with residential cleaning and transition to commercial later? Absolutely! Many successful cleaning businesses begin in the residential sector and expand into commercial cleaning as they gain experience and resources.
- What’s the typical pricing difference between residential and commercial cleaning? Residential cleaning rates often range from $25 to $50 per hour, while commercial cleaning rates typically range from $0.10 to $0.50 per square foot, depending on the complexity and frequency of services.
- Do I need special equipment for commercial cleaning? Yes, commercial cleaning often requires specialized equipment, such as industrial vacuums, floor buffers, and additional supplies that may not be necessary for residential cleaning.
- What is the average cost to start a residential cleaning business?
We polled over 80 cleaning business owners, and more than half reported starting their residential cleaning businesses with less than $1,000. Starting small and scaling gradually allows many entrepreneurs to enter the market with minimal upfront costs. - How much can you make in commercial cleaning? Profit margins for cleaning businesses typically range from 10% to 25%, influenced by size and structure. Initially, if you’re doing the cleaning yourself, margins can be higher. As your business grows, you’ll transition to management, and your earnings will depend on the systems you implement for growth. With the right strategy, your earning potential can be limitless.
Ready to Start Your Cleaning Business?
Check out our blog post where we walk you through all the essential steps to starting a cleaning business, from planning and supply selection to acquiring customers. You’ll gain the knowledge you need to grow your cleaning business at your own pace.
