There is often confusion among new business owners about whether you need a license to start a cleaning business. 

Well, when you're cleaning you do have to enter into another home or business and do your work right? 

In fact, to legally operate, you often need to obtain a general business license. Plus, to follow local regulations or work with specific clients, you might require a unique insurance or bond.

To help you out, we have covered everything there is to know about cleaning service licenses --- from what licenses are needed to start a cleaning business to the types of cleaning service insurance. 

Let's dive in.

What Are Cleaning Service Business Licenses?

A business license informs the government of the existence of your cleaning business. This enables them to verify that you are abiding by the law and paying all applicable taxes. 

Before you can launch your cleaning service, you must acquire a business license in practically every state in the country. A business license is also necessary if you plan to employ any foreign nationals for your cleaning company to complete the necessary I-9 papers.

Although the specific process differs depending on your location, licenses are not hard to get.

If you're thinking about starting a residential maid service or any cleaning service business, you'll need to choose between buying a franchise and starting independently. 

Whatever route you take, you'll need a business license, along with tools and materials, before you can start providing cleaning services.

When you're prepared to launch your cleaning company, you can register your business name and obtain a DBA or "Doing Business As" registration.

Why Do You Need a License to Start a Cleaning Business?

Though you might not know it, getting a business license can have a significant impact on your business. To make sure that your cleaning business is running lawfully, you should have a business license. 

Before you sell anything to the general public or wish to lease office space or start a store, a license is necessary. The repercussions may be severe and may include fines, license suspension, jail time, and other penalties.

Many clients will also check your license before hiring you, so if you don't have one, you can lose out on business.

Purchasing supplies without a license could also cost you more. In fact, wholesalers often only sell their items to licensed enterprises as a matter of trust.

What Licenses Are Needed for a Cleaning Business?

A vendor's license and a DBA license are mostly required when starting a cleaning service business.

Here's what you need to know about these license types:

• Vendor's License 

A vendor's license is identical to a basic business license. Usually, there is a procedure for applying and a fee must be paid. If necessary, the authorities may ask to inspect the business location or vehicle. 

A vendor's license enables you to pay sales tax, which certain states demand, on the cleaning materials you buy. 

You can probably collect these sales taxes if you invoice customers separately for cleaning supplies and the service.

• DBA 

If you operate your business under a name other than your legal name, you must obtain a DBA license. To safeguard consumers from unethical business operations, the majority of states demand DBA licenses. Additionally, it forbids the use of your company name by other businesses.

• Service Contractor's License

A contractor is merely a person contracted to carry out certain tasks or supply specific products. You are still a contractor even if a client hires you to clean their home once a week because they aren't employing you directly (they are hiring you to perform a service).

Before you start your cleaning firm, several states request that you obtain a contracting license. To learn more about how to apply for and obtain your contractor's license, you can contact the small business administration in your state.

How Do I Get A Cleaning Business License?

Start by contacting the department of revenue or department of taxation in your state to obtain a license for your cleaning service business. Depending on where you live, you can be routed to your county clerk or city licensing board.

When you locate the ideal department, they'll outline the requirements for obtaining your cleaning or janitorial license. A surety bond or a company bank account may need to be opened first. They'll also go over the costs with you and offer you forms to fill out.

The majority of vendor licenses require annual or periodic renewal. Every state has a five-year DBA license expiration date. Most states demand a renewal fee for any license to keep your cleaning business license active.

Bond and Insurance for Cleaning Service Business

You can start your client search when you have the appropriate license. However, remember that some clients can demand that your business must be bonded and insured. 

To put it simply, being insured and bonded both simply imply that your cleaning company has paid for business insurance.

Here's an overview of how bonds and insurance policies work:

Bond Claim

Your client obtains funds from the bond carrier through a bond claim (also called a surety). A janitorial bond, for instance, compensates your client if they declare that one of your staff members stole from them. The full cost of the surety must then be paid back by your company. 

There are two types of bonds, 

• License and Permit Bonds 

This bond shows that your cleaning business will abide by all federal, state, and local laws. Additionally, it shields government organizations from litigation that customers can bring about as a result of your cleaning business's performance.

• Janitorial or surety bonds

Although not needed by law, surety or janitorial bonds are frequently stipulated in client contracts. This bond safeguards clients if one of your staff is said to steal from clients or if the client alleges that you failed to deliver the promised cleaning services. It does not, however, cover common property damage to the client's residence or personal possessions.

Insurance Claim

When you make an insurance claim, the insurance provider pays your firm back for the damage. You get a check for the lump sum and spend the money on things like repairs and legal costs. Because there is no requirement to pay back the insurance provider, commercial insurance is more expensive than a bond.

Here are the types of insurance claims, 

• General Liability Insurance

General liability insurance is a requirement for the majority of small businesses. This insurance shields your cleaning service from lawsuits brought on by client injuries and property damage.

• Commercial Auto Insurance

State laws typically mandate commercial auto insurance for cleaning businesses with company vehicles. If a company car is involved in an accident, commercial auto insurance will pay for the legal fees, medical bills, and property damage.

• Workers' Compensation Insurance 

Most states will require you to carry workers' compensation insurance as soon as you hire your first employee. Workers' compensation pays for medical expenses and replaces lost wages for injured workers.

• Hired and Non-Owned Auto Insurance

Whether your service mostly cleans homes or office buildings, you have to travel to many locations. Accidents that happen while using personal vehicles for business are typically not covered by personal auto insurance. As a result, you must acquire hired and non-owned auto insurance if you, your employees, or anyone else uses a personal or hired vehicle for work.

Cleaning Business License Cost

The kind of business you can start is governed by local laws in each state. They also have many laws and guidelines governing the cost of a business license. 

To find out the costs of a cleaning business license, the best thing is to contact your local government department. 

Usually, the cost of a business license is about $75. The cheapest option can cost as little as $30 to register as a sole proprietorship. A Limited Liability Company (LLC), which costs between $100 and $500, is an additional choice. You can choose which cleaning business license costs best match your needs. 

The Bottom Line

There are obviously more measures you would want to take for your business in addition to obtaining a license and getting bonded. 

For instance, you might want to incorporate your company. This goes one step beyond declaring yourself a sole proprietor and creates a separate legal entity for your cleaning service that has its own tax identification number from you. 

Your savings are secure if your firm ever incurs trouble or files for bankruptcy. But, this is probably not necessary if your plans only call for a little side business.

Like every other business, home and commercial cleaning companies deal with dangers every day. Your business and your clients are protected if you have the appropriate insurance and bonds.

Make sure you are abiding by state and local laws by obtaining the appropriate cleaning business license, bonds, and insurance.