Financing a new business of any kind can be challenging, and it’s important to consider all available options before you spend time planning other aspects of your venture.
One aspect of cleaning businesses that sets them apart from other industries is frequently low start-up costs and quick earning potential. On top of this, there are plenty of viable finance options.
In this blog, we’ll cover everything you should consider when it comes to financing a cleaning business, from startup costs to revenue streams and financial support unique to cleaning businesses.
*Disclaimer*: Ovenu are not a financial advisor. Anything published under our brand or by our franchisees should not be considered financial advice.
Costs when setting up a cleaning business
When deciding on the best way to finance a new business, you first need to establish the unavoidable sunk costs. This typically includes everything involved in setting up the business from a legal and practical standpoint.
- Cleaning equipment and supplies
- Insurance
- Training and certifications (if needed)
- Uniform and branding
- Vehicle or other transport costs
- Marketing and advertising
- Franchise fees (if applicable)
Good financial management, especially early on, is essential to long-term success. So while all cleaning businesses will vary in terms of start-up costs, you should focus on the above areas when calculating your total investment.
Finance options for new cleaning businesses
Start-Up Loans
Under the Start-Up Loan Scheme backed by the Government, you can secure a loan of up to £25,000 if you live in the UK, are over 18, and your UK business has been trading for less than 36 months. As this is a personal loan, you’ll still need to pass a credit check. At the time of writing, there is a fixed 6% interest rate on Start-Up Loans.
Bank loans
Loans from high street banks are common for new business owners, as you have the flexibility of choosing the amount of finance you need. Business loans start at £500 and can go up to £15 million. However, prospective lenders may ask to review credit reports, accounts, and your personal finances when gauging eligibility. You should also consider the interest rates of the loan, as this will affect how much you regularly repay, as well as the fees.
Asset finance
Some of the largest investments for new cleaning businesses come in the form of assets, such as personal transport or specialist equipment. Asset finance is a useful option that allows new owners to spread out the cost of expensive equipment over time.
Personal savings
Many new business owners use personal savings to fund start-up costs. The advantage here is that you have full control without any debt. Plus, it’s generally recommended you keep some funds reserved for emergencies or cash flow gaps.
Third-party investment
You can try to secure additional funding by offering investment in your business as an opportunity for third parties. This could be friends, family, or private investors who believe in your idea. Networking is typically the most effective way to secure private investment for new businesses.
Simpler financing through franchising
Many lenders specialise in funding franchise businesses as they recognise the reduced risk of operating under a proven business model. For instance, all Ovenu franchisees are guided through the process of how to set up a UK oven cleaning business, and any bank that has dealt with Ovenu or one of our operatives before will have an additional level of trust. Our oven cleaning business plan also includes detailed financial projections so you can track your expected costs and earnings at every turn.
Alisdair Murray – “I purchased the franchise as a resale and so had an established territory and a full diary from day one. The training and technical support, as well as the administration advice, were invaluable, enabling me to cope with the demand for the work and keep on top of further enquiries and bookings going forward. 14 years later, the support has continued with the changing economic times and technical developments from manufacturers to ensure a continuously full diary. I would thoroughly recommend Ovenu as a franchise”
Ongoing costs of running a cleaning business
You’ve got your cleaning business off the ground and you’re breaking even – brilliant! However, you now need to manage the regular costs of the business to ensure your finances are in the green. Business costs can fluctuate due to various internal and external factors, so you should regularly monitor cash flow to assess your situation. This can include:
- Equipment repairs
- Replenishing cleaning supplies
- Fuel and other transportation costs
- Corporation Tax
- Marketing
- Management software and subscriptions
- Employee wages (if applicable)
Finance your business with franchise support
When you join up with Ovenu, we take the time to go through ‘the numbers’ involved in running a local oven cleaning business. This involves a thorough appraisal of our profit and loss forecasting so you have a full understanding of how to monitor your finances each month. You’re in charge of setting your targets, but we’ll provide guidance if we think they’re missing the mark. This goes both ways; if our team feels they’re too low, then we may boost them up, and if we feel you’re being too ambitious, we’ll advise lowering them.
Peter Truesdale – “I have been a franchisee for coming up to five years and have seen the territory grow beyond what I realistically imagined when starting out. A large part of this has understandably been through hard work, but without the support of Ovenu HQ together with the network of other fellow franchisees, it’s unlikely I’d have seen such rapid progress.”
“A well-structured training program, both ‘on the tools’ as well as from an administration perspective, gave the confidence to thrive in what would otherwise have been an intimidating new chapter.”
This is just one example of the kind of ongoing support we provide to our franchisees as an extension of the Ovenu brand. Our franchise package also includes:
- Franchise training and resources
- Ongoing marketing and advertising
- Internationally recognised brand
- Specially formulated eco-friendly cleaning products
- Exclusive trading territory
Our oven cleaning franchise cost breakdown
All franchises will have different investment costs, regular fees, and forecasted earnings, all of which should be evaluated when deciding which option is the most profitable for you. To that end, we thought we’d break down the packages we offer, including the initial investment, ongoing fees, and number of homes in the territory:
- Foundation opportunity (£12,400 + VAT) – around 30,000 homes with fixed management fees of £43.53 a week equivalent + VAT.
- Foundation Plus level 2 (£12,400 + VAT) – 30,000-60,000 homes with a tiered fee structure starting from £61.15 a week equivalent + VAT.
- Foundation Plus level 3 (£17,450 + VAT) – 60,000-100,000 homes with a tiered fee structure starting from £61.15 a week equivalent + VAT.
- Foundation Plus level 4 (£27,450 + VAT) – over 100,000 homes plus a tiered fee structure starting from £61.15 a week equivalent + VAT.
Potential earnings with Ovenu
The average order value for UK-based Ovenu franchisees is over £100 across all makes and models of oven. This also includes popular add-ons to our services, such as fitting replacement extractor hood filters and oven lamps. What’s more, the associated overheads and expenses of each job typically come in at less than £25. Using these averages, if you were to book 15 jobs a week, that comes to £1125 a week in profits. Taken over an entire year, this means your oven cleaning business will be comfortably making over £50,000 in profits.
Ready to get started?
Starting your own cleaning business is a big decision, and it’s easy to get bogged down wondering how to finance a new business. Luckily, there is a wide range of finance options available for cleaning businesses, so you can pick what’s best for you.
The barriers to entry for new cleaning business owners are even lower due to the low running costs and the ongoing support available through franchises. You’ll have everything you need to make the most of your investment and build a business you can be proud of.
If you have any questions about cleaning business finance or how to join the Ovenu franchise, don’t hesitate to get in touch.