3 Tips for How to Start a Commercial Cleaning Business

If you are looking to start your own lucrative business, you should try to start a commercial cleaning business. A commercial cleaning business is a business that has a team of people clean commercial buildings. Commercial buildings include everything from office buildings, to warehouses, to retail buildings, and more.

Like with any business, starting a commercial cleaning business requires tons of time and effort. It also requires an extensive business plan.

To help you create your own lucrative commercial cleaning business, we are providing you with 3 key tips you need to know to start your business off right.

Get ready to be a business owner!

1. Tip for How to Start a Commercial Cleaning Business: Select a Legal Entity

A legal entity is a company or organization with legal rights and obligations. When creating a business, it is important to first decide what legal entity the business that you own is under. There are three main options for business legal entities.

The first option is sole proprietorship or partnership. Having your business classified as one that is of sole proprietorship or partnership means that your business is at a high enough distinction level that you are not obligated to register or report it with the state government. Unfortunately, this also means that you and any business partner you have are now solely responsible for any debts or issues that your business has.

The second legal entity that you can file your business under is that of a limited liability company, otherwise known as an LLC. Being a limited liability company, or LLC, allows your business to have some legal liability protection while still requiring you to pay self-employment taxes.

Making the decision to file your business as a limited liability company could either save you tons of money or cost you tons of money, depending on what state you live in. In fact, the cost of filing your business as an LLC can range anywhere from $40 to $500 depending on your state residence. Thus, it is important to weigh all the pros, cons, and costs of filing your business under each legal entity prior to making a decision on which one to choose.

The third legal entity that you can file a business under is a corporation. If you file your business as a corporation, your business becomes its own entity. This means that all your personal assets are safe. Beware though, as this also means that both you and your business can be taxed.

Having your business filed as a corporation also means that your business has to comply with more regulations. Usually, if you own a small business, particularly a new small business, filing your business as a corporation is not a legitimate option for you.

Making your business a corporation could lead to it becoming its own franchise one day.

2. Register for Taxes

The second tip that we suggest that you follow when building cleaning business is register for taxes. When starting a new business, you want to make sure that you are doing everything you need to do to not get in trouble with the IRS or the law. Thus, it is vital that you register your business for state and federal taxes prior to opening it up for the public.

To register your business for taxes, you need to first apply for an employer identification number, or an EIN. Luckily for you, applying for an EIN is free. All you have to do is apply for one through the IRS website, or by fax or mail.

3. Set Up a Business Account and Credit Card

The third tip we suggest that you follow when you start a commercial cleaning business, is set up a business bank account and credit card. It is important to set up a business bank account for your upcoming commercial cleaning company so that you have a separation between your personal and business finances. Having a separation between your business and personal finances protects your personal assets from being possessed if your business is sued or goes under one day.

Having a business bank account that you can directly make payments towards and make checks with also gives your business credibility. The same credibility and financial safety that having a separate business bank account for your upcoming commercial cleaning company will give you is the same credibility and financial safety that having a separate business credit card will give you.

Before you open a business bank account, it is important to note that there are different banking requirements for businesses of different legal entities. For example, if your business is a limited liability company (LLC), you will have to show the bank your state registration papers prior to setting up an account with them.

If your business is a sole proprietorship or partnership, you will have to share your Employer Identification Number assignment letter from the IRS with your bank prior to setting up a business bank account. If your business is filed as a corporation, there are several strict requirements that you must follow.

Make Sure to Consider All the Costs

Like when you file your business under your chosen legal entity, the cost of starting a commercial cleaning business can vary greatly depending on the business decisions you make. The larger you plan on making your business, the more money it will cost to start it up.

Some basic expenses you will need to pay for when you are first learning how to start a commercial cleaning company include cleaning supplies, utilities, insurance, and transport vehicles.

You will be able to gain some reimbursement for your investments in your commercial cleaning company from the money your initial clients pay you. Most commercial cleaning businesses charge their customers $50 to $150 an hour depending on the number of cleaners that come and clean the commercial building. The amount of money that your clients will ultimately need to pay for your business’s cleaning services will also vary depending on the flat fee that you decide to charge your clients.

To learn more about the cleaning industry, check out our other blog articles.