The demand for professional cleaning services presents a viable business opportunity in Michigan. Launching a company to meet this need requires careful planning and adherence to state-specific regulations. This guide provides a step-by-step framework for starting a cleaning business, from initial strategy to client acquisition.
Create Your Business Plan
A business plan serves as the strategic roadmap for your new venture, providing direction and proving valuable if you seek funding. A primary element of your plan is defining your service niche. You might choose to serve residential clients by cleaning houses and apartments, or focus on commercial spaces like offices and retail stores. You could also specialize further by offering environmentally friendly “green” cleaning or specific services like carpet and window cleaning.
Identifying your target customer is another component of the plan. For a residential business, this might be busy families, while a commercial focus could target small professional offices or property management companies. Your business plan should also include financial projections, estimating startup costs and setting realistic revenue goals for your first year.
Fulfill Michigan’s Legal Requirements
Your business’s legal structure affects liability and taxes. A sole proprietorship is the simplest structure, but it means you are personally responsible for all business debts. Many small businesses form a Limited Liability Company (LLC) to protect personal assets from business debts. To establish an LLC in Michigan, you must file Articles of Organization with the Department of Licensing and Regulatory Affairs (LARA).
After choosing a structure, you must register your business. For an LLC, this involves filing the Articles of Organization, while a sole proprietorship using a name other than your own must file an Assumed Name Certificate (DBA) with the appropriate county clerk. You can check name availability using the Business Entity Search tool on LARA’s website.
Obtaining a Federal Employer Identification Number (EIN) from the IRS is another step. An EIN is required if you plan to hire employees or open a business bank account, and it helps protect your Social Security Number from identity theft. While Michigan does not issue a statewide license for general cleaning services, you must check for local requirements with your city, township, or county clerk’s office.
Manage Your Business Finances
Managing your finances begins with planning for startup costs. Initial expenses include:
- Legal fees for business registration
- The cost of initial insurance policies
- Professional-grade cleaning supplies and equipment
- Marketing materials, such as flyers and business cards
Funding can come from personal savings or a small business loan, which often requires a well-developed business plan. A fundamental step is opening a separate business bank account. This action keeps your business and personal funds separate, which simplifies tax preparation and protects your personal assets if you’ve formed an LLC.
Get Insured and Bonded
Protecting your business involves securing both insurance and bonding. Insurance is designed to cover accidents and liabilities. General Liability insurance is the most common policy for a cleaning business and can help pay for costs related to accidental property damage or client injuries. For instance, if you accidentally break an item or a client slips on a wet floor, this policy would cover the resulting expenses.
A surety bond, specifically a janitorial bond, protects your clients from theft. If an employee steals from a client’s property, the bond reimburses the client for their loss. Unlike insurance, if the bonding company pays a claim, you are required to pay that money back. Offering services from a bonded business is a selling point that signals you are a trustworthy professional.
Price Your Services and Purchase Supplies
Determining how to price your services requires finding what works for your business and clients. A common approach is charging an hourly rate, which ensures you are paid for all time worked. Another option is a flat-rate fee per job, which customers often prefer for its predictability, while pricing per square foot is standard for larger commercial spaces. Researching what other cleaning companies in your local Michigan market charge can provide a valuable benchmark.
Equipping your business with the right supplies is necessary for providing high-quality service. You will need:
- Basic cleaning solutions for different surfaces
- A commercial-grade vacuum cleaner
- A mop and bucket system
- An assortment of microfiber cloths and sponges
- Personal protective equipment, including gloves and masks
Market Your Cleaning Business
Acquiring your first clients requires a focused marketing effort. Start by creating professional flyers and business cards that list your services and contact information, then distribute them on community bulletin boards in places like coffee shops and libraries.
Building a local network can lead to a steady stream of referrals. Connect with real estate agents and property managers who often need reliable cleaning services for their clients and properties. Attending local business association meetings can also put you in touch with other business owners who may need commercial cleaning.
An online presence is also important for reaching customers. Create a free Google Business Profile to appear in local search results and on Google Maps. You can also use local social media groups to introduce your business and post about your services.
Consider Hiring Employees
As your client base grows, you may need to hire employees to keep up with demand. Before hiring, you must be prepared to handle payroll, which involves paying wages and withholding payroll taxes. You will need to register with Michigan’s Unemployment Insurance Agency (UIA) to handle unemployment taxes. Many small businesses use payroll software to simplify this process.
Once you hire your first employee, Michigan law requires you to obtain Workers’ Compensation insurance. This insurance covers medical expenses and lost wages if an employee suffers a work-related injury. You should also develop a clear job description and a simple employee handbook to set expectations regarding duties and company policies.