Basically starting a cleaning business is a good business idea bearing in mind that cleaning services are always in high demand. Nonetheless, following important steps and legal prerequisites have to be accomplished if you want to work legally.
Another crucial factor is the issue of licenses and permits to allow operations to happen legally. The license provides proof that its holder is legal in its operations and has the potential to win the confidence of people or clients in society.
What licenses are needed to start a cleaning business?
Here is what this guide contains – the list of licenses you are going to need in order to start the cleaning company and create the plan of how to start it all on your own.
1. Business License
A business license is the simplest and most fundamental license required for any legal operation. It permits you to operate your cleaning business within a certain geographical area, for example, state, town, or city. Some states require business owners to acquire a license within a specific period by completing a form, while others require you to apply and meet specific requirements of the issuing body; the costs of getting the license range between $50-$500.
To obtain a business license you should go to your city or county office or go online to their website to pick up an application. Remember, this license has to be renewed on an annual basis.
2. Federal Tax Identification Number (FTIN )
An EIN is assigned by the IRS and is required if you are going to hire employees for your new business. If you work for yourself as a sole trader, getting an EIN is recommended as it enables the owner to distinguish themselves from the business formally. You can obtain an EIN effortlessly through the IRS website and this service is costless.
3. Bonding License
This is especially preferred by so many clients because it offers an extra measure of guarantee. A bonding license shields clients from acts of theft or damage to property by personnel you employ in your business.
Although bonding is not a compulsory process in all the states it is encouraged since its benefits result in the enhancement of your business credibility and the clients are sure that they are protected.
If you want to get bonded, then you will need to contact a surety bond company, and the cost of your surety bond is based on the percentage of the bond amount and can be anywhere from $100-$600 per year depending on what type of bond you decide to go with.
4. Liability Insurance
Although in actuality it is not a license, liability insurance is a necessity for any cleaning business. This insurance covers you in situations where there are legal prosecutions when performing services whereby somebody has been involved in an accident, got injured or the client’s property has been damaged. For instance, if one of your employees by any chance damages a property belonging to a client, an instance where you find yourself helpless, and unable to do anything about it, liability insurance covers the cost of the damages.
Liability insurance is offered depending on the size of the business as well as the type of coverage and it ranges from $300 to $1000 per year.
5. Employees’ Compensation Insurance
Any time you decide to take employees, you must ensure you work under the provision of the workers’ compensation insurance. This insurance covers the expenses when one is sick and takes time off orison’s compensation if injured while working. Many states require that workers’ compensation insurance is mandatory, hence it will be wise to get more information concerning your state’s legal provisions.
These policy costs depend on the size of the payroll and the risk level of the industry in which you operate. Softatomos are expected to cost cleaning businesses between one hundred and two hundred and fifty dollars each per annum, or between five hundred and two thousand, five hundred dollars, per annum collectively.
6. Occupational License
Some cities or states require an occupational license for cleaning services to be conducted. Such a type of license is usually needed where professionals operating in particular trades would need a license to prove that they are operating legally and to the standard requirements of the state laws.
It’s important to consult your state licensing board or regulatory agencies to discern if an occupational license is required.
7. Environmental Permits
Depending on what your cleaning business involves, it is likely that you will need permits to use some chemicals, or if you dispose of dangerous substances. Such permits always keep you on the right side of the law concerning your impact on the environment and proper handling of dangerous substances.
Depending with your state, as well as the type of cleaning services that you will be offering, then this may need an Air Quality Permit, Hazardous Waste Disposal license, or Water Discharge Permits.
8. Franchise Disclosure Document (FDD)
Should you decide to purchase cleaning services from a franchiser there is the Franchise Disclosure Document (FDD) that has to be learned. This document provides information relating to the monetary expenses and legal responsibilities necessary to maintain operation under the franchise of the parent organization.
It is not a license but a legal document that a person has to go through elaborately and then sign before he or she puts into operation a franchise.
How to Determine Which Licenses You Need
Among the permits and licenses required to start a business of cleaning it is noted that some of them may depend on a country, state, or city and the type of business to be run by the owner. To ensure you’re fully compliant, follow these steps.
Contact Local Government: Contact your city or county hall to find out more particularly on the specific cleaning services business licenses or permits needed.
Check with the State: Some states have other requirements more so for companies with employees or those handling harmful substances.
Consult an Attorney: Pro it’s always wise to turn to a business attorney who will be able to guide you through what is mandatory to have and do.
Final Thoughts
A cleaning business should therefore be started after proper planning and keenness to some legal aspects. As you get the licenses and the insurance in place, not only are you in compliance with the applicable laws but your clients trust you and your business and this puts the business on the right foundation for future growth. The idea of getting these documents safeguarded in the first place will keep you off legal setbacks later on and help your business run smoothly from the word go.
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