Starting a commercial cleaning or janitorial business can be extremely lucrative. Not only can you determine your own hours when you are the business owner, but you directly dictate how often you work. When you own a business, you control your stream of income and create a successful business.
Starting a commercial cleaning business is a great idea, mainly due to its low cost. With anywhere from $500 to $1000, you can be on your way to owning and operating your own business!
The first step in opening any business is to obtain proper licensing, and the same is true with a commercial cleaning business. You need to hold a business license for cleaning. Although obtaining a license is a simple process, it is absolutely essential before beginning any operations.
How to Start Your Cleaning Business
A few quick steps must be taken before starting your cleaning business.
- Licensing and permits
- Fidelity bonds
- Purchase basic cleaning equipment
- Obtain customers
Why Do You Need a Commercial Cleaning License?
To start your commercial cleaning business, you need to begin by getting at least a vendor’s license. Because you are a business owner, you must pay sales taxes on any non-wholesale revenue you earn within your state. Appropriate licensing is required, and without it, you will not be legally allowed to operate.
Permits and License Needed For Cleaning Business
Cleaning business license cost is generally low, but you need to obtain your commercial cleaning business license before you do anything else. Typically to start a janitorial or commercial cleaning business, you need both a vendor's license and a Doing Business As (DBA) registration.
To apply for a vendor's license, contact your local county administration office or city hall. The process is simple. Fill out an application and pay the required fee, which is usually less than $50.
You also may need to apply for a “Doing Business As” license. This is only necessary if you use a fictional name for your business. This license may be applied for at the same time as your vendor's license.
Holding a commercial cleaning licensing requires that you have federal insurance and bonds. The insurance that you need covers the valuables that your clients own. So, you need both General Liability insurance and a few other forms of insurance as well.
General Liability Insurance for Cleaning Service
General Liability insurance is the most basic coverage for any business. It protects your business in the event of property damage or bodily injury claims, as well as personal or advertising injury claims.
Although this policy is often known as commercial General Liability insurance or Business Liability insurance, it is essential to have this coverage when you hold a cleaning service license. Mainly because, as a cleaning service, you go to many different locations. When you work away from your home base, you run the risk of damage to other people’s property.
Mainly, this policy protects you against wasting your time, your employees’ time, and your resources.
Business Owners Policy Insurance
Also known as BOP, a Business Owners Policy is very useful for small businesses. This coverage not only includes general liability protection, but it also adds a few different types of property protection as well.
- Equipment Breakdown: If your steamer breaks down halfway through a job, this insurance protects you from losing money by not being able to fulfill the contract and replaces the equipment.
- Storage: If you have to store your equipment somewhere and it gets damaged, this insurance protects you. Whether it is a flood or fire, a BOP helps cover the cost of repairing and replacing.
- Business Income: If a disaster occurs, then you will be covered for the income you lose.
- Electronic Data: Most modern-day cleaning services keep client contracts and employee schedules in digital form. If something occurs and your files are damaged, stolen, or lost, this policy covers you.
- Employee Dishonesty Coverage: Your employees are people that you trust, and they typically have access to a lot of expensive equipment. If something goes awry and an employee steals from you or does something else dishonestly, your BOP protects you from these losses.
Workers’ Compensation Insurance
Also known as Workman’s Comp or Workers’ Comp, this form of insurance is important if you have any employees that work for you. Workers’ compensation gives your employees benefits if they get a work-related injury or illness.
These benefits include:
- Covering medical care for job-related injuries
- Paying for lost wages during recovery
- Providing disability benefits
- Paying for funeral expenses if they lose their life on the job
If your injured employee or their family sues your business, then Workers’ Compensation helps you cover your legal costs.
Who Needs Cleaning Insurance?
There are various types of cleaning businesses, but all benefit from insurance.
- Carpet cleaning: If you accidentally damage the carpets you are cleaning, your general liability insurance covers the costs to replace them.
- House cleaning: If one of your employees breaks a sculpture while cleaning, your insurance covers this cost without causing too much damage to your business.
- Dry cleaning and laundry services: If you spill your coffee on your client’s items, you will be covered to pay for the cost of the damage or replacement.
- Office cleaning: If your employee sustains an injury while working, either your general liability or workers’ compensation plan covers this.
- Janitorial services: Say your employee, or even you, forget to put the “caution wet floor” sign up. If someone falls and gets injured, you will be covered to pay for the injuries, even if you go to court.
Cleaning insurance helps to protect against bodily injury claims, property damage claims, and personal and advertising injury claims. So, regardless of damage, injury, or even copyright infringement, you will be covered.
To obtain a cleaning business license, you must have this bond as well. In most business situations, these depend on the city or state, but in the janitorial world, this bond is known by a few different names:
- Janitorial Surety Bond
- Cleaning Services Surety Bond
- Cleaning Surety Bond
Surety bonds are valid for a specific length of time. After it expires, you must renew it to keep operating. Renewal costs a lot less than your original bond premium.
Why Do I Need Bonding?
Surety bonds protect you and the client from theft, misconduct, any dishonest employees, and even fraud. Holding bonding insurance guarantees that your clients will never be held financially at fault, or legally liable if something were to happen.
Surety bonds also protect you when a worker is cleaning homes. If the worker gets injured while on the job, an insurance claim can be filed against the bond rather than the homeowner’s insurance.
Holding bonds is also a method of showing your clients that you are a professional business. This bond assures clients that if something happens, you can reimburse them. Clients feel confident that they would be covered. Bonds also act as a promise that an agreed-upon service will be completed.
You can also choose to advertise yourself as a “licensed and bonded” cleaning service as a marketing tool.
How Much is Bonding?
Bonding costs vary depending on a few factors:
- the state in which you operate
- the number of employees you have
- the level of clients you serve.
Despite this, generally, if you have fewer than five employees, you may only need to carry $5,000 worth of bonds. Higher bond amounts are required when you have more employees.
The price of your bond is known as the premium. The premium amount changes based on your credit score, how much you require, and the company supplying the bond.
Supplies Needed To Start Your Commercial Cleaning Business
Along with your commercial cleaning license, many different cleaning supplies are needed to start your business.
- Vacuum cleaner
- Paper towels
- Toilet bowl cleaner
- Toilet brush
- Dustpan and brush
- Dry mop
- Wet mop
- Various buckets
- Latex gloves
- "Wet floor" signs
- Extension cords
- Window cleaner
- Bathroom cleaners
- Furniture polish
- Soft scrub product
- Steel wool pads
- Feather duster
- High-reach duster extension
- Holding caddy for supplies
Where to Start
After obtaining all of the necessary licensing and bonding, the next step is to decide where you will clean. Typically, more money can be earned in cleaning large commercial buildings. However, this can also be difficult to take on right off the bat. Almost every commercial building needs a cleaning service, so finding smaller businesses is a great stepping off point. Look for banks, daycare centers, gyms, convenience stores -- even doctor’s offices and schools. Everyone needs a cleaning service. The world is yours, now step out as fully licensed and bonded...and clean it.