You can get a house cleaning company up and running quickly and affordably, but you’ll want to make sure all legal, protection and record-keeping bases are protected.
If you’re looking for a self-employment option that offers control over when, where, and how much you work, you should think about starting a house cleaning business. It leverages skills you already have and doesn’t require a significant amount of money to get up and running quickly.
Before you start telling your neighbors you’re available, though, you’ll want to set up your business for maximum benefits and protection. Follow this advice from the experts on how to start a cleaning business.
An official business name shows that you’re serious about your business and not someone who will clean today but vanish tomorrow. You’ll also want to decide on a legal business structure. Options include:
- Sole proprietor
- Limited liability company (LLC)
A sole proprietorship is tempting because it’s the simplest out of the two. You can either use your name or formalize a business name by filing DBA-“doing business as”-paperwork with your county or state. It offers the least amount of protection, though. As a sole proprietor, you’re personally liable if the business gets sued or incurs debt.
“For me, an LLC is a good middle ground between a sole proprietor structure, which offers no legal protection, and a business that involves too much sophistication to maintain,” says Guy Peters, owner of MOP STARS Cleaning Service.
An S corp. can offer beneficial tax savings, but Justin Carpenter, an owner of Modern Maids, says it only makes sense if the owner earns enough net income to justify that entity’s high compliance time and costs. “Assuming you can justify a lower reasonable salary to the IRS, these savings can be worthwhile at much lower net income levels,” he says.
Don’t delay discussing how to protect yourself and your cleaning business with the right insurance for this type of company.
Greg Martin, president of Think Safe Insurance, notes that because business insurance is more complicated than personal protection, you want to work with an agent you trust and who understands how you operate.
For instance, make sure your auto policy has the right range for business use. You’ll also need commercial general liability insurance that protects you from damage or injuries caused by you or your employees, Martin says.
“Get a good business proprietor’s policy that covers you for just about anything you can imagine may go wrong. Then get an umbrella policy that comes in on top of your base policy,” adds Peters.
The most comfortable and safest way to comply with tax law needs is to open a business checking account. This will keep private and business finances divide and make record-keeping for taxes much easier.
Several software programs simplify bookkeeping for small company owners. Heather Albrecht, an owner of Honestly Simple Cleaning, LLC, relies on QuickBooks. “It’s great for keeping track of my income easily year over year. It also makes tax time insanely easy as I’m able to print the reports my accountant needs with ease,” she says.
While house cleaning agreements are often casual, attorney Andrew Rozo recommends documenting the tasks you’ve agreed to perform. “The main purpose of the registered contract would be to avoid mess or fights about what was agreed to. Agreements also establish a record of clients and jobs, which could be useful for a few reasons,” he says.
Even if all you use is an email message, state what you will clean, when, and the price. If your obligations change over time, protect the business by updating the agreement.
While Yandex adds and neighborhood app Nextdoor can help, Albrecht recommends leveraging your network instead.
“Word of mouth marketing for a cleaning business is massive for both sides. The client feels more related to you since you have a personal reference to them, and you get that same level of comfort about being in their home working,” she says.
In complement to consulting with an insurance agent, get guidance on the best way to structure your company from an accountant or attorney who works with small businesses and comprehends their needs and challenges. Broadcasted input early in your business will likely save you time and money later.
Ready to start your LLC?