How to Start a House Cleaning Business

How to Start a House Cleaning Business

by Brette Sember, Esq., March 2016

Starting a cleaning business is a great way to work for yourself, earn money, and be independent. Starting a house cleaning business does require some forethought and planning, though, if you want to be successful.

Business Formation

If you want to start a house cleaning business, it is possible to simply clean people's homes for cash, but you run the risk of getting in trouble with the IRS for not reporting your income, and you also may be violating local and state laws about business registration.

As a Sole Proprietor

To protect yourself, you need to formalize your business and report your income. To work as a sole proprietor, you can operate under your own name, or you can choose a name for your business. You will likely need to file with your county or state that you are “doing business as" (DBA) this name. You can obtain the filing form online and pay a small fee to file it. You may also need to file for a business registration or license in the county you will do business in. It's important to know what licenses and permits are required in your state.

As a Limited Liability Company or Franchisee

Another option for starting a cleaning service is to form a limited liability company, to try to reduce your personal liability. You will need to file LLC papers with your state's Secretary of State online, forming your cleaning business. You may also wish to consider buying a franchise of an existing cleaning business. Doing so could give you a proven business model and a recognizable name, but has added costs.

Be Accountable

Getting and staying organized will be critical to the success of your cleaning business:

  • Once you choose your business type, you will want to open a bank account for your business so that you can keep records of income and expenses.
  • Create a calendar system so you can schedule your clients.
  • Research the cost of the supplies you need and create a budget that includes all of your expenses. Don't forget the cost of a good vacuum.
  • Set your fee schedule and determine how long it will take you to clean different size homes.
  • Set up a basic accounting system so you can track bills and payments.

Income Taxes

When starting a cleaning company, you will need to record your income and expenses. Keep in mind that all of your supplies, advertising, and transportation costs are business expenses for your business. If you are a sole proprietor, you will file the taxes yourself on your personal income tax Form 1040. If you decide to establish your house cleaning business as an LLC, you can continue to file taxes yourself as an individual as long as you are the sole owner.

Employees

For your business to grow, you will need to hire employees now or in the future. If you are going to hire employees, you will need to obtain a federal tax ID (or EIN, employer identification number) and withhold state and federal taxes for your employees. You also will need to verify your employees' eligibility to work in the U.S. by filing a form with U.S. Immigration and Customs Enforcement.

Insurance

You will need to obtain liability insurance that will cover any damage or mistakes you or your employees make. If you hope to clean for more than a handful of friends and family, this insurance is absolutely necessary. Contact your current insurance agent for a quote and also check with an insurance broker in your area who can get quotes from a variety of companies.

Advertising

When starting your own cleaning business, effective advertising can be the key to getting more clients:

  • First, consider offering a discount to clients who refer friends and family to you. Word of mouth advertising is often the best, particularly for a business that works within someone's home.
  • A simple website can provide the details about your service, share some glowing testimonials from clients, and offer your contact information so people can get in touch with you.
  • Ads in local papers, especially community papers, can be successful for drumming up business as well.

Knowing how to start a cleaning business can present a great opportunity for you to become a business owner and be in control of your own income.

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