What license do I need to start a cleaning business?
As a budding entrepreneur looking to start a cleaning business, there are a lot of things to consider. Understanding the legal requirements is one of the most important. This may lead you to ask what license do I need to start a cleaning business.
This blog post will guide you through the process of obtaining the necessary licenses and insurance to start your cleaning business.
The cleaning industry
In the UK the cleaning industry is one of the biggest employers. With over 1.47 million employed in 2020, according to the British Cleaning Council.
Even more apparent is the increase in domestic cleaning services. As high as 1 in 3 households in the UK employs a cleaner.
Introduction to starting a cleaning company
Starting a cleaning company can be a lucrative venture. Not only can you successfully gain financial reward, but a flexible work/life balance too.
In today’s career-focused world, people are working long hours, increasing the demand for cleaning services.
However, before you can start your company, you need to understand the legal requirements involved.
Importance of getting your license for a cleaning services
Getting your paperwork in order is a strong step in ensuring your business is secure. Doing so will give you peace of mind and go a long way in securing clients.
What is a business license?
A business license is a documentation that allows permission for certain types of business. These can be government authorised or issued by your local council. An example of a business license is for an establishment selling alcohol.
Decide the type of cleaning services you want
The three different types of cleaning businesses require a different set of licenses, insurance and qualifications. Before you get started decide whether you want to:
- Clean homes (domestic),
- Clean businesses and public spaces (commercial) or
- Specialised cleaning (such as medical or industrial cleaning).
Decide your business status: sole trader or limited company
Next, decide whether you want to set up a sole trader company or a limited company. There are advantages and disadvantages to both, but the main thing to consider is that a sole trader is self-employed.
As a sole trader, you’re responsible for all aspects of your business yourself.
A limited company is separate from yourself but with the main difference of having limited liability for your business.
The legal requirements for starting a cleaning business
The legal requirements for starting a cleaning business can vary depending on your location. However, in most cases, you will need to obtain a business license and comply with various regulations.
Failure to do so can lead to hefty fines, legal action, or even the closure of your business.
Do I need a business license for starting a cleaning company in the US?
If you’re operating in the US, you will likely need a license to start your own cleaning company. Rules and regulations around licenses differ across states and local authorities.
For a cleaning company in the US, you may need a DBA license (Doing Business As) and a vendor’s license.
A DBA license is used to protect consumers from unethical business practices. You need to apply for this license if your business is called anything other than your legal name. This is to prohibit your business name from being used by other companies. A DBA license will last 5 years.
A vendors license
A vendor license allows companies to collect sales tax on supplies- which is required in some states. This is a requirement if you charge clients separately for cleaning products. These will need to be renewed annually.
If your state requires a proper cleaning business license and you operate without one this is illegal.
How do you get a business license for US businesses?
To obtain a business license, you will need to meet certain requirements. These may include applying, providing proof of insurance, and paying a fee. The specific requirements vary depending on your location, so it’s essential to research the requirements in your area.
Often contacting the department of revenue or taxation to obtain your business license.
They will guide you through the process. You may also be required to open a business bank account or even purchase a surety bond first.
Do I need a business license for starting a cleaning company in the UK?
Put simply, you do not need a business license for starting a cleaning company in the UK.
However, there are some exceptions.
If you plan to handle and dispose of hazardous waste, you will need a waste carrier’s license. This is for carrying waste on the public highway. That’s if you buy, sell or dispose of waste.
Research any potential licensing requirements for your specific industry and location. This is to ensure that you are operating within the law.
However, there are certain legal requirements that you must follow to start your own cleaning business.
Do cleaners need insurance?
Starting your own little domestic cleaning business, going from home to home is not legally required to have insurance. However, once you start employing staff to clean for you, it is the UK law to get insurance.
Next, we will go through the different types of insurance required for the different types of cleaning services.
Types of cover needed for a cleaning business
Insurance for a cleaning company
Entering the homes, offices or property of your clients to clean requires the utmost trust. They expect their space and valuables to be treated with care.
As a professional, it’s your responsibility to reassure your clients that they are in safe and trustworthy hands.
Having insurance is a protection against these unfortunate accidents, ensuring you, your employees and your clients are protected.
Public liability insurance for cleaning services
What is public liability insurance?
Public liability insurance covers you for any damage or injury caused to a third party by your business operations. This insurance is essential for cleaning businesses since accidents can happen, and you want to protect your business from liability claims.
This type of insurance covers businesses that have claims against them that are proceeding to a legal matter. The insurance covers the cost of these expenses, including compensation.
What is an example of using public liability insurance?
This type of cover is important as accidents can happen. An example would be if you were cleaning a property and accidentally knocked a drink onto expensive equipment causing damage. Or far more common, someone slips on your mopped floors (and forgot to put up a sign) and gets injured.
Your policy will cover the compensation cost of this.
Will I need public liability insurance for both domestic and commercial cleaning services?
Although not required by law, it’s good practice to be covered by public liability insurance. This applies to cleaning homes or larger commercial spaces.
Employer’s liability insurance for cleaning services
If you plan to hire employees for your cleaning business, you will need employer’s liability insurance. This insurance covers your business if an employee suffers an injury or illness while working for you.
Employers’ liability insurance covers the cost of compensating employees who are injured or become ill through work.
Will I need employer’s liability insurance for both domestic and commercial cleaning services?
Employing staff requires employers’ liability insurance.
Without employers liability insurance you may be fined. This can be as much as £2,500 for each day you are not covered with the proper insurance.
However, if you’re a family business with only family members employed you may be exempt from paying employers’ liability insurance.
Professional indemnity insurance
Professional indemnity insurance protects your business from claims made against it by clients. It covers you for errors and omissions in the services you provide.
For a cleaning business Professional indemnity insurance is not necessary.
Business equipment insurance for cleaners
Insuring your equipment for the job is a smart idea. If you’ve accidentally damaged them or if they’ve been stolen, you can ensure your tools for the job are protected.
Motor insurance for cleaning services
If you plan to use a van for your cleaning business, you will need to obtain motor insurance. This insurance covers you for any damage or theft of your van, as well as any third-party liability claims.
Cleaning Chemical Safety (The COSHH Regulations)
COSHH stands for The Control of Substances Hazardous to Health. These regulations require that you assess the risks associated with the chemicals you use in your cleaning business. You must take steps to protect yourself, your employees, and the public from any harm caused by these chemicals.
Additional licenses and permits a cleaning business may need
There may be other licenses and permits you need to obtain, depending on your location and the services you offer. These may include waste disposal licenses, health and safety permits, and environmental permits.
DBS criminal records check
While not necessary, you may benefit from obtaining a DBS criminal records check. This will give your business a trusted brand and professional image.
What qualifications and training do I need?
While qualifications aren’t required to start a cleaning business, there are certain skills and training that may be beneficial. Understanding the breadth of cleaning products and techniques can help you provide high-quality cleaning services to your clients.
There are various training courses available for aspiring cleaners, such as the British Institute of Cleaning Science (BICSc) courses. These courses cover topics such as cleaning methods, safety procedures, and customer service.
Pay your tax for your cleaning services
Even if you only do residential cleaning, that’s still income that will need to be taxed.
You must declare all income earned.
You are also responsible for filing your tax and national insurance. The process where you pay your taxes to HMRC is through a process called self-assessment.
Getting started on paying tax for your cleaning services
Even for domestic cleaners, you must first register yourself as a business.
Then you can fill out your self-assessment. You will only need to pay income tax on earnings over £12,570 (as of 2022-2023).
Tips for filling out your self-assessment:
- Create a document which notes all of your monthly earnings
- Write down all expenses such as cleaning supplies and keep receipts
- Use digital tools to help manage and track the paperwork side of your company
Conclusion and next steps for starting your cleaning business with the right licenses.
Starting a cleaning business can be a rewarding venture, but it’s essential to understand the legal requirements involved. By obtaining the necessary licenses and insurance, you can protect your business and avoid any legal issues. Use this guide to navigate the legal landscape and start your cleaning business with confidence.
For more blog posts like this, you can find out more by reading our cleaning business guide beginning with the client onboarding process here. Client onboarding process flow chart