The 101s of Making a Cleaning Business Budget
One of the essential components of running a successful cleaning business is budgeting since it helps you keep track of your expenses and limit spending. However, it also gives you an insight into how healthy your business is, which is crucial for setting future plans and financial goals.
When you’re setting up your business in Houston, finding a profitable cleaning franchise for sale is one of the first steps to take. However, in order to keep it up and running, it’s essential that you make a detailed budget for your company. Read on to find out how to do it.
What are the expenses for a cleaning business?
Creating a meticulous budget that lists all the expenses, including payroll, tools, and equipment will help you run your business smoothly and create an efficient plan for future activities. Let’s take a look at how to properly budget:
Equipment
A cleaning business typically has low requirements regarding equipment. However, the minimum you should consider budgeting includes:
- A selection of cleaning products, including eco-friendly options
- A duster, bucket, mop, and vacuum cleaner
- A vehicle
Financials
Your bookkeeper should provide you with three principal financial statements which include:
- Balance sheet – what you owe and own
- Income statement – expenses and sales
- Cash flow statement – where your cash went and came
A cash flow forecast is another useful tool which can help you follow up on your progress compared to the goals you’ve set. It typically encompasses a period of 13 weeks, but you can also go for an annual forecast, then update the numbers monthly.
Payroll
Payroll makes a vital part of any company since that’s how your employees get paid for their job. To keep them motivated and happy, it’s essential they receive payments on time, regularly, and at the rate you agreed upon.
Many owners decide to process payrolls on their own thus saving money. If you’re one of them, you can choose from a variety of platforms, some of the most popular being:
- Gusto
- Xero
- OnPay
- Quickbooks Payroll
- ADP Small Business Payroll
However, if you decide to outsource this process to an accounting firm, you’ll be able to focus on other aspects of growing your business.
Payroll taxes
According to the US rules and regulations, you must pay federal and state income taxes, as well as Medicare, and Social Security taxes. However, you’re also required to pay local costs such as state disability, school district taxes, and unemployment insurance.
Another reason to outsource payroll to professionals is that you can face hefty penalties if you mistake any of the tax calculating specifics.
Break-even point
The point where your total revenue and total costs are equal is called the break-even point. This means your company isn’t making any profit, but it also isn’t losing money. It’s a significant point in the growth of any business since, once passed, it indicates your company is profitable.
When you calculate this point, you’ll be able to define the minimum sales you need to generate money, and it can be an excellent guide for important decisions such as lowering costs and price changes.
Where in Houston can I find a reliable cleaning franchise for sale?
Whether you’re looking to expand your cleaning business or only starting one, MaidThis Franchise is here to assist you in everything from finding your desired niche to providing proper training for your cleaners.
You’ll have access to a well-devised system that renders guaranteed success and a strong reputation. Whether your business is located close to the Space Center Houston or anywhere else around Houston, we’ll help you grow it. Reach out to us today.