If you want to own and operate a cleaning business in the U.S., you’re going to need a few things. You’ll need dependable workers, insurance, bonding, and licensing.
The rules for business licensing depend on where you work, your clients, and your type of business. Here’s everything you need to know to get a license, including the price breakdown, the benefits, and additional resources.
What is a business license, and do I need one?
A business license allows your business to function legally in your state.
Cost breakdown of business licenses
Generally, a business license will cost about $50; however, the cost of obtaining a business license varies in all 50 states. There are also renewal fees and other fees associated with registering a business in the city/state. Sometimes it varies between counties, depending on the licensing you choose for the company.
How to get a business license
When you register your business with the state, you will receive what is called a business license. A house cleaning business, for example, might register as a sole owner with the county clerk, “doing business as” (DBA) the company name. The DBA allows you to promote and operate under the business name. But, all tax purposes are handled through your personal tax identification number.
The first step for getting a license for your cleaning business is by starting at your city’s revenue or taxation department. In addition, there is a chance you will need to visit the county clerk or city licensing board if you live in an area that requires specific regulations.
States have many different rules about licenses. For instance, some states issue licenses by the state, county, and town levels only. The city or county clerk’s office will guide your next steps if you need a state license. In many areas, you will need both county and city or town licenses.
In almost every location across the country, you will need to obtain a business license before starting your cleaning company. Business licenses are essential because they ensure that you follow the laws that apply to your company and allow you to pay your taxes correctly.
Also, if you hire any alien workers for your cleaning business, you will need a business license to fill out the required I-9 forms.
When you select the correct firm, they’ll walk you through the steps to obtaining your cleaning or janitorial license. You might need to register a business bank account or get a surety bond beforehand, for example. They’ll also go over the fees and offer you some help completing forms.
What you need to apply for licensing
You’ll need to provide the following information to apply for a business license:
- Type of business
- Business address
- Name of business owner
- Contact information
- Federal ID number
- Number of employees
Many city clerks will ask for your employer identification number. This is your company’s equivalent of a social security number, and it will come in handy for everything from opening a bank account to filing taxes. An EIN is free to obtain, and you will need it to license your business. While applying for a license, the clerk may ask you questions about your business, including:
- Revenue estimate
- Type of business
- Growth projection
Be prepared and have all of your documents ready before applying for the license. To avoid being charged unnecessary fees, bring all of the documents with you. By doing this, you will eliminate the possibility of being rescheduled or waiting due to unpreparedness. In addition, every local government will have different policies, so do your research and prepare yourself for any bumps in the road.
Types of licenses for small cleaning businesses
Vendor’s license: A vendor’s license is often identical to a normal business license. It enables you to collect sales tax on cleaning goods, which is required in some states. Furthermore, if you charge consumers for cleaning supplies in addition to the service, you will almost certainly be obligated to collect sales tax.
DBA license: If your business is known by a name other than its legal name, you’ll need a DBA license. To protect customers from unethical business operations, most states need DBA licenses. It also prevents other businesses from using your company name.
The majority of vendor licenses must be renewed every year or every few years. In every state, DBA licenses are good for five years. Most states require a fee to renew your cleaning business license, regardless of the license you have.
Licensing rules by state
States Licenses Required:
Alaska, Delaware, Hawaii, Maryland, Nebraska, Nevada, New Hampshire, Oregon, Utah, Washington, & West Virginia
County Licenses Required:
Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Montana, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Wisconsin, & Wyoming
Only City And Town Licenses Required
District of Columbia, Maine, Massachusetts, Minnesota, Missouri, Rhode Island
Nav’s Business Licensing page gives more information on licensing requirements state by state. It also lists a chart ranking each state’s licensing websites by helpfulness.
Benefits of licensing your business:
When you license your cleaning business, you put your business at the forefront of the industry. Cleaning is a personal service as the action takes place usually in someone’s home or rental. Being licensed, bonded, and insured gives clients the assurance that their property will be covered by a third-party company.
Ensuring your company is properly licensed helps to bring protection to yourself, your employees, and your customers. Having the correct license will ensure your personal assets are protected in case of a lawsuit as well as providing protection for you if your business is damaged.
Aside from a license, small cleaning businesses should also look into purchasing insurance policies to cover their employees and property. Read our extensive Insurance 101 blog for more information regarding insurance.