Financial Responsibilities As A New, Small Cleaning Business

I have been contacted by several individuals who either want to start a cleaning service or have one or two small accounts and want to grow. In a former life, I conducted 1-3 day workshops, usually partnering with a distributor, on start up and management of a cleaning business. 

Your “small” business is actually a micro business since you do not come anywhere near the $5,000,000 threshold with SBA (Small Business Administration). Even though you may be micro at this time you will be held to many of the same laws (especially IRS, OSHA, EPA) as your larger competition out there on the same playing field. Once your employee count hits certain levels, your obligations and paper work will increase exponentially. For now your plate will be full with understanding and abiding by the requirements that are considered minimum.

1. Consider whether to be a sole proprietor, S corporation, Limited Liability Corp, or full blown corporation. Please note that I am not a tax expert so you need to research this topic thoroughly before you go too far down the road. There are distinct tax benefits and financial exposure to each one.

2. Consider liability, workers compensation, theft and other required insurance since most prospective customers today will require it for you to even be allowed to bid.

3. Look at your current opportunities within 1, 5, 10 and more miles out. Try to focus on accounts that are close to home to minimize travel and other costs.

4. Although you can bid on any size contract, consider your resources and how long you can wait to get paid since it can be 30-90 days for some accounts. How will you meet payroll, equipment, insurance and other costs.

The days of simply buying a mop bucket and used vacuum cleaner are fading into the sunset. We will discuss other challenges future articles. Your comments and questions are important. I hope to hear from you soon. Until then, keep it clean…

Mickey Crowe has been involved in the industry for over 35 years. He is a trainer, speaker and consultant. You can reach Mickey at 678-314-2171 or CTCG50@comcast.net.