I am sick of daycare raising my children and we are to a point that I can go to part time work doing something. I currently clean 2 houses on the side and have 2 more interested in using me. I have decided that I enjoy the work and would like to start doing this as my job. I have always been very good at cleaning & organizing things and have thought of starting doing this before but hadn't had a good enough reason to disrupt my life and quit the 9-5 until now. I want to be with my kids for more than 2 hours and I don't want to always be in a hurry! This way I can schedule things 2-3 days a week and (somewhat) work around my kids' lives instead of having them work around me. My mother-in-law is going to take them 2 days a week so that will be a HUGE help to get this going (I hadn't previously used her for daycare because she's in the opposite direction as my 9-5).
I know there are other ladies on here that also have their own cleaning businesses so I need some advice. It will just be me (no employees) and it will likely end up being 5-7 houses/offices a week.
1) Should I go through the rigamarole of starting up a business (registering a name, getting a tax id #, separate checking account, etc) as a sole proprietor or should I just give out reciepts for the amounts I recieve as an independent contractor under my real name? (I will be paying quarterly taxes so I can have a verifyable income and because, well, my moral compass says I should - I know not all people do)
As far as I can tell, the good thing about doing it as a sole proprietor is having a business name to run under for things like liability insurance, business cards, referrals, etc.
The good things about doing it as an independant contractor would be that I don't have to keep track of the $ separately - what I make will already be in my account and I won't have to write myself a check out of the business account for my weekly income.
Any other positives or negatives about doing it either way? Which way would/did you choose? Is one way easier on taxes? Do you get different deductions (like mileage and such)?
2) If I just do it as an independant contractor, can I still get liability insurance for it or do I have to have it registered as a business?
3) Any tips for me as I get started as far as the business side goes?
4) Any tips on where to advertise other than Craigslist?
Thanks for any help!
For those concerned about the number of jobs I want to do: I only plan on cleaning 2 houses each of the 2 days my Mother-in-law will have them (approx 3-4 hours per cleaning), maybe 3 if I can do an office or if someone wants one done in the evening after my husband gets home from work. The one I already have I do on Saturday and I would likely leave that one on Saturday as it is working out good for all parties (my husband doesn't work weekends).
So that would be 5-7 cleaning jobs in 2 1/2 days. The whole point of this is to not have the kinds in daycare 10+ hours a day, 5 days a week and to be able to have 3-4 days a week we can just "be" and not have to rush around all the time. Believe me. I will have no problem doing 2-3 houses in a day stamina-wise. Last weekend I cleaned 2 houses (my normal one and one special) and then came home and cleaned my own house including some extra closet cleaning. I get on a roll and in "cleaning mode" and it's hard for me to get out of it! LOL! My husband makes fun of me saying "uh-oh, she's in cleaning mode again - RUN!" LOL!
Thank you for all the advice and keep it coming! I may go ahead and do the Sole Proprietor thing so I can have a "business name" and thank you to the person who suggested I have a different account linked to my regular one for the business transactions even as an independent contractor. That is exactly the kind of advice I was looking for! :)
I can answer number 4. Care.com and Sitter citty have a spot for you to put your name out there.
You are doing this as a legit business not just extra cash to make under the radar.. I wish you lived closer to me. I would hire you. :)
Good Luck
You have put a lot of thought into this and have come up with good questions. I sense from your line of questioning that you will do well because you are thinking things through very carefully... Best wishes!!
As a business owner myself, I would first consult a reputable CPA and legal attorney. I know it is some upfront expenses but the last thing you need is issues with IRS, etc. We set our company up as a LLC, I file quarterly reports with the IRS and TWC (TX Workforce -- unemployment fund), process payroll (just the 3 of us--- hubby, me, daughter) and monthly payroll taxes among a lot of other things.
I would set up a separate business because you need to keep personal and business separate. I use Quickbooks Pro 2013 for all of my bookkeeping. It is easy to use. I do subscribe to the program to keep my payroll, etc updated and I process payroll through QB and pay the taxes through it as well. Easy to do.
Yes you need a tax number, state sales and use permit, W-9. The government keeps track of everything we do. We have to show the W-9 to our vendors. We are in raw materials therefore the end user is the one who pays the actual tax on the product but we still have to submit reports even though we do not collect or pay tax on our materials.
I run weekly expense reports which include airfare, personal mileage, hotels, rental cars, webpage charges, entertainment, supplies, etc. I'm probably considered OCD when it comes to my detail with my company as far as receipts, and to the penny reconciliations,etc. You can run your business cards through the expense reporting... we get ours at staples and 100 cards are about $30. We pay $14 a month for our website.
Depending on how large and busy you get.... you have options for other things such as fully finding medical coverage and 401K's. Our company pays 100 of the medical and we have 401K's set up as well. Of course this is not something you have to do from day 1 or at all if you intend to be more personalized and keep your business relatively small.
I don't know any details regarding liability insurance. You might ask the CPA, attorney or your insurance agent about that. Our insurance is based on our materials in case they are damaged in transit, wrong formulation, etc.
Bottom line, I would set this up as a separate business and then you go from there with the growth. As for pricing, I don't know your area well but I pay my housekeeper appx $30/hr and she comes once a month and is here anywhere from 5-6 hours. I am charged more because of the house size. She and her hubby take their daughter to school then then have at least 1 house a day that they clean then pick up their daughter. I always pay cash.
Best wishes to you!!
PS.. as far as advertising.. many schools put ads in the student directories which are reasonably priced. Of course the best advertising is positive word of mouth!
You only need to Fictitious Name if you want to have a company name. Otherwise they just pay you. However, if you're looking to really grow it, a company name may look more professional than just using your name. So, that's something to consider.
You don't need a tax ID unless you're going to hire employees. If it's just going to be you, then don't worry about it. If you get to the point where you need help, then do it.
I would suggest having a separate account regardless. ALL money received for work needs to go in to this account. ALL money spent for supplies, etc for this business needs to be paid out of this account. You do not want to mix things up and wonder if that trip to Home Depot was personal or for cleaning supplies. It makes it MUCH easier at the end of the year to do your taxes. You know exactly how much money you took in. And you know exactly how much money you spent. If you link the two accounts, you can just transfer the money, you don't have to write a check. I know how much I make each week, and how much I want to transfer to my personal account, so I just have it scheduled to automatically transfer every Friday.
You should be able to get liability insurance no matter how you do it.
I would suggest joining a networking group like BNI (http://www.bni-mi.com). You meet weekly usually for breakfast or lunch - and the goal is to give each other leads. So when the other members hear someone say they need a housekeeper, they would refer you. It's a really great organization. You may find other similar groups in your area that work as well too.
Good luck!
Come up with a business name and a phrase that is catchy, for example:
Hartline Cleaning - We get to the heart of your cleaning needs. (If you like this, feel free to use it :)
Business cards you can get from Staples or Vistaprint.com. Vistaprint also does websites for $5/month if you go there, but I don't think you would need that. They DO do car magnets and have a lot of different types/desigs. Prices are reasonable.
Don't bother with craigslist. Word of mouth is best. Talk to your friends about the business. If you want to do business, see if you can get a foot in where they work. If you want to do residential, choose the person that just goes on and on about how great something is to all her friends and give her a free sample.
Go to meetup.com and join a business networking or two in your area. I belonged to a group like this and the cleaning person got steady work. Business networking groups are relationship oriented and word-of mouth based. You could raffle off a "free" clean to the group, and if you make them happy, they would probably do a testimonial that could get you more business.
PM me and I'll try to think of more stuff :)
I leaned houses and ended up having to turn away work. Word of mouth should be enough o keep you busy.
I worked as an independent contractor.
I do 3 part time jobs, 2 are for trade and 1 is for cash. I keep track of my income on that job and we file it on our taxes at the end of the year. I do not have a separate account nor any sort of insurance. The people I iron for won't sue me if I ruin a shirt, well, let's hope not.....
I have always done it this way and we always still get money back on taxes. I think that you won't be able to clean that many houses well in just 2 days per week. Most housekeepers take about 3 hours per house so they can count in travel time between them and breaks. So 2-3 at most per day is the best you should shoot for. To me that means you're still thinking about working 3-4 days per week.
I would talk to the car insurance agent or your home owners agent about personal liability insurance. When I was the president of Habitat in my area I carried that just in case someone wanted to sue us. Any small business owner can add that on to their car insurance usually. What I mean to say is that my agent had access to many different types of insurance and personal liability is one of them they can add on to your monthly car insurance bill, it's not connected to the car insurance but another policy they have access to.
Open a seperate bank account for your business. So for eg have Jane Smith dba name if your company. I.e dba is doing business as.
You sound very dedicated ....wish you were closer to Ann Arbor :)
I only use people through 'word of mouth.' i never look at ads, craigslist etc. so do a good job with your first homes then your name will get around. same thing if you don't do a great job, bad name goes round as well.
example, i had a cleaning lady once who preferred to clean without anyone around and she didn't charge per hr more like a set amount. after i got comfortable, i started going grocery shopping when she's come to clean. one time i had forgotten my cc so i returned to my home 40 min after i had left, lo and behold she was gone. i called her cell and asked her if she was coming back, and she said no i am done. a house with 5 bedrooms, 4+ baths does not get cleaned in 40 min. i fired her and told my other friends who were using her. turns out she did the same thing to others.
