How to get a cleaning business license
If you find your zen with a mop and broom in hand, you’ve probably thought about starting a cleaning business. However, creating a cleaning business takes more than getting quality cleaning supplies and hitting the grout; there are a few steps you need to take to make sure your business stays squeaky clean.
Luckily, it’s simple for cleaning entrepreneurs to get their businesses up and running. Below are some steps to help you get your cleaning business off the ground.
What is a cleaning business license?
A cleaning business license certifies that you can perform professional cleaning services in your area. The cleaning business license application process is more or less the same as a general business license application. Still, your local government may have specific licensing requirements you’ll need to meet.
You may also need to get a vendor’s license, enabling you to collect sales tax for your services. In many areas, however, a vendor’s license is the same as a general business license. Check with your local government to verify.
The type of business structure you decide on (sole proprietorship, Limited Liability Company, etc.) can affect your licensing requirements. The size and types of buildings that you work with can also affect this. For example, if you plan on starting a home cleaning business, you may need more in surety bonds.
Why do I need a cleaning business license?
If you’re planning to do cleaning as a favor for a friend or are employed by a cleaning company, you most likely don’t need a business license.
However, if you plan to start your own business as a cleaner, especially if you plan to hire cleaning employees, you must get a business license to protect your customers and your company.
You’ll need a business license to apply for an Employer Identification Number (EIN) with the IRS, which acts as your business’s social security number. You’ll need an EIN to file your business income tax, hire employees, and open a business bank account. It’s a good idea to have an EIN, even if you’re a sole proprietor.
And, of course, having a cleaning business license helps your clients know that you’re trustworthy and that your business will do the best job possible cleaning their home or office.
How much does a cleaning business license cost?
The exact cost of the business license will vary depending on your local government, but there are some fees you should expect to pay.
First, there’s the cost of the license itself. A business license can cost anywhere from $50 to a few hundred dollars, and most business licenses need to be renewed regularly, usually every year. If the vendor’s license is separate from the general business license in your area, you will also need to factor in this cost.
Many areas require cleaning businesses to hold a certain amount of janitorial business insurance. If you hire employees, you’re required to have a certain amount of workers’ compensation insurance.
If you plan to use a business name different from your legal name, you may need to file a DBA (Doing Business As) form. A DBA helps verify that you are authorized to conduct business under your business’s name and helps protect your clients from fraud.
Many municipalities will let you hold your business name for a fee so that you can finish your business license application without worrying that someone will snatch your perfect business name from you!
Nebraska requires new businesses to publish a Notice of Organization for 3 weeks in a local Nebraska newspaper to inform the public of the new company. Many newspapers also charge a small fee to run the Notice.
What is a surety bond?
A surety bond reimburses clients if a business does not perform services as agreed or if there is a case of employee theft. These are also called janitorial bonds in the cleaning industry.
Surety bonds are critical when doing residential cleaning or performing janitorial services since workers will have access to the building and valuables or sensitive documents.
A surety bond is different from other insurance types, like general liability insurance or workers’ compensation insurance, because they require you to pay back the money used to pay a claim. However, you won’t be required to pay it back at once, so the expense won’t severely disrupt your cash flow.
Many local governments require a surety bond to start a house cleaning business or commercial cleaning business, but even if your area doesn’t require it, a surety bond is still a good idea to have. Cleaning services with surety bonds inspire more trust in their clients and get more business and often higher-paying clients.
What is the difference between a business license and a certification?
Business licenses are issued by your local government (usually the Secretary of State or county clerk), recognizing your company as a legal entity that can conduct business in your area. All business owners are required to have a business license.
A certification shows that you’re qualified to perform a specific service, like mold removal. Certifications are usually issued after you’ve passed an exam and are awarded by the testing body or your trade’s governing board.
Your employer or clients may require you to complete a certification, but local governments rarely require them. You do not need to pass an examination in most areas to receive a cleaning business license.
Conclusion: How Huckleberry can help you kickstart your cleaning business
Keep your new business protected by getting small business insurance with Huckleberry!
With Huckleberry, you can get the same excellent cleaning business insurance for a fraction of the price of legacy insurance companies. In under 5 minutes, you can get a quote with the insurance you need and purchase policies through our easy-to-use online portal; no need for an insurance agent!
As a cleaner, you can get caught in some pretty sticky situations pretty quickly. Get a quote with Huckleberry today to learn more about protecting your business, and enjoy some peace of mind.