In this article, we will discuss licensing methods for initiating a cleaning service – the benefits of licensing, bonds, and insurance for your safety and workers.
Let’s get into further details on the topic –
- Why do I need a license for my cleaning business?
- Licensing fees for a janitorial business:
- Licensing procedure and types:
- Information you need to apply for a janitorial business license:
- Initiating a janitorial business in a different state:
- Insurance policies for janitorial businesses:
- General liability insurance:
- Business owners’ policy insurance
- Workers’ compensation insurance
- Bonds you will need:
Why do I need a license for my cleaning business?
To run any business, licensing is the first thing every business owner must obtain. Business licenses allow one to operate through legitimacy by paying taxes to the state.
Licensing fees for a janitorial business:
Usually, licensing a small business cost around $50, however, it sometimes differs from one state to another.
Besides, some additional expenses must be considered, like the renewal fees and other registration costs.
In different states, businesses pay different fees for licensing their commercial cleaning businesses.
Licensing procedure and types:
Prior to other methods, one must obtain their janitorial business license upon which your office cleaning service will be authorized to operate.
Whilst initiating a cleaning business, you will need two licenses:
- Vendors’ License: A vendor’s license is actually the basic license for any business. It enables you to operate and work across all states. Also, you can charge taxes on cleaning and selling. Some states require a license to collect tax on cleaning products you purchase. Sometimes janitorial businesses charge their customers for cleaning supplies. A vendor’s license is what makes it legal, which requires annual renewal with a small charge.
- DBA License: Say your business has a legal name but it’s known by another, then you will need a DBA license. It will protect your business name from unethical uses. Moreover, other businesses will not get any legality while using your business’s name with a DBA license.
Most states require the DBA license to be renewed after every five years.
Some states issue licenses at the state, country, city, or town levels only. In some states, you will need both a country and a city-level license.
The state’s administration office will drive you in the right direction if you seek advice.
Any business owner can apply for such licenses in a short time by incurring a small fee; however, if the process seems like a hassle, then there’s also a more convenient alternative like an agency could do it for you.
By paying them a small fee, agencies will handle all the legwork to get your house cleaning license or janitorial business paperwork.
Information you need to apply for a janitorial business license:
Applying for a license requires some general information about your business.
Usually, you’ll need to provide the following information in your application form:
- Type of business
- Name of the company
- Company owner’s name
- Business location or address
- Contact details
- Employees’ number
- Federal identification number
We would like to inform you that in some city government offices, the officers will ask you for an EIN.
Obtain one before you go there.
Getting an Employer Identity Number is free of charge, and you will need it to apply for a license; moreover, this number will help during your future operations.Be prepared with all the documents.
Also, it’s best if you research as much as you can about your state’s licensing process to avoid hassles.
Initiating a janitorial business in a different state:
In the US, the process of starting a janitorial business differs between one state from another.
Not all states follow similar rules or regulations. In some states, you will need a country license.
Some states require city or town licenses, and some require both country and city or town licenses.
According to the state’s rules, businesses need to apply for the appropriate licenses following different processes.
Insurance policies for janitorial businesses:
After you get the licenses for your janitorial business, the next step should be insuring the business organization.
Insurance covers your business’s safety to protect it from unforeseen calamities.
Here is what type of insurance you will need:
General liability insurance:
For a janitorial business, general liability insurance is a must. It’s the basic insurance policy for businesses covering possible damages or bodily harm.
To operate a cleaning business, employees must go from door to door for inspection before handing over any estimate as we assist you by connecting with office managers through our janitorial appointment setting program.
If ever any client’s property is damaged by mistake, then your insurance policy will cover it; therefore, it’s crucial for cleaning businesses to compensate for the damages, if incurred.
Business owners’ policy insurance
A business owner’s policy insurance is a combination of commercial property insurance and business liability insurance.
If a business owner gets a business owner’s policy insurance, then he does not need to obtain those two types of insurance policies.
This insurance protects your business against any accidental losses or damages like fire, flood, theft, vandalism, or other issues.
If your customers’ contracts, files, or data get lost, it also helps to save money from buying several insurance policies.
Workers’ compensation insurance
Janitorial business owners hire a number of employees to run their operations.
Employees visit from door to door delivering the required work they have.
Workers’ compensation insurance covers any harm or damage that happens to the workers.
If the employees suffer from any work-related injury or illness, the company can compensate for their loss with workers’ compensation insurance.
If any of them dies during their job life, this insurance policy will cover their hospital bills, injuries, lost wages, disability benefits, or funeral expenses.
An interesting fact is that if the worker’s family sues your business for their harm, the workers’ compensation insurance will cover your business legally.
Janitorial businesses require obtaining bonds to ensure customer security.
A bond does not cover your company; instead, it covers your customers’ losses caused by the employees.
The bond protects your customers from theft, fraud, and misconduct by your employees, and it’s necessary to obtain your business organization for instilling customers’ trust.
Having a bond proves you are a professional janitorial business owner.
It assures that if the customers face any issues or any loss by the workers, they will be covered. They feel confident when a business is bonded.
Cost of janitorial bonds:
The cost of janitorial bonding depends on some specific factors. These bonds are among the cheapest for businesses.
Here are some factors to consider -:
- The state where you intend to conduct business
- Number of employees.
- standard of the customers.
Depending on the amount these bonds will cover, the cost is relatively lower.
It mostly depends on how many employees are working for your company.
If the number of employees is equal to or more than five, then it may cost you around $5000. The more employees you have, the more expensive bonding will be.
Your bond price is known as premium. Bond premiums depend on your credit score, how much coverage you want, and the quality of your service delivered to each customer.
Bonds you will need:
Licensing, insuring, and bonding cleaning business adds extra value to your janitorial business. The customers want to hear the words “licensed, insured, and bonded”. These three words will establish your business as a professional janitorial cleaning company while enabling you to charge higher fees than other cleaning businesses.
This is recognition. So whenever you start a business of your own, get these essentials.