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There Are Advantages to Incorporating Your Cleaning Business

 

Much like any other small business, mine started with one person (me), the idea to start a cleaning business and a strong desire to diversify my income stream by creating multiple income streams. A few months of planning, research and my cleaning business was born – Father & Son Cleaning Services.

Since I was the lone ranger in my newly formed business, my company structure was a sole proprietorship. This also happens to be the simplest of business structures.

Like most entrepreneurs with big dreams often don’t wait too long before expanding into incorporating their business. A few years (or months) of steady growth and a plan to continue to expand the business is more than enough incentive to incorporate your cleaning business.

Despite that incorporating a business comes at a stiff price, there are quite a few benefits to incorporating your cleaning business. And if you’re looking to take your cleaning business to the next level, grow it, and hire staff – a corporation is the preferred structure.

If you’re like my self still and own a cleaning business, you are still operating as a sole proprietor. A sole proprietorship is when the entrepreneur directly owns all of the assets and is personally responsible for all the debts and liabilities. The big advantage of being a sole proprietor is the simplicity, especially when it comes to paperwork.

However, if you’re planning to grow your cleaning business, hire more staff and gain more credibility, incorporating your cleaning business may be right for you due to added benefits:

  1. Ownership stakes are easier to transfer.
  2. Owners benefit from limited liability.
  3. The life of the corporation can extend beyond that of the founder or founders.

One of the most attractive advantages of a corporation is that it acts as a separate legal entity and owners do not own its assets directly. Instead, they own shares in the corporation, which in turn owns the assets. And in the future if you’re looking to sell your cleaning business, transferring ownership stakes are much easier.

Incorporating your cleaning business comes with a limited liability, which essentially means the owners are not personally responsible for the obligations or acts of the corporation within legal limits. Potential losses are limited to the amount invested in the corporation, except if the owner has provided a personal guarantee, which many banks require.

The other key advantage that incorporated businesses have is that they benefit from a theoretically unlimited life. When shareholders die, their shares are willed to their heirs or transferred through a sale. Sole proprietorships, on the other hand, automatically dissolve when their principals pass away.

Despite  so many advantages to incorporating your cleaning business, one small downside to being a corporation is the additional cost and effort. A corporation must maintain a separate set of accounting records, separate from the owner.

Corporations must also pay annual registration fees, and must file separate financial statements and tax returns.

A typical tax return for a sole proprietor (like my cleaning business) runs me roughly about $100 every tax season. This includes the filing of my own personal tax return as well.

A corporations tax return will run in the few hundreds of dollars and sometimes up to a thousand dollars. This is simply due to the extra paperwork and complexity of completing a tax return.

Despite a little more paperwork and extra costs, it’s worth it to incorporate your business. There are much more benefits versus down sides. Plus you can write off your tax preparation as an expense.

PCI

Four Things Every Entrepreneur Can Do In 2012

January is a traditionally slow month for most business. People are getting back from mini holiday vacations. It takes time to get back into the groove and get back into the grind. As a business owner or business owner to be, you are planning ahead. One key characteristic of being every entrepreneur is the ability to plan ahead. So, I hoped you planned for the New Year. Planning ahead helps you focus what you want to accomplish and breaks your big goals down into smaller daily tasks.

 

So, with that being said, here are five things every entrepreneur can do in 2012 to make the year ahead a successful one.

1. Set Personal Goals

In order to achieve any goal, you first must set the goal. You should know where you’re going, how you’re going to get there and what you will need along the way. Think about where you want to be by the end of the year. Break it down into smaller goals. Not only is it easier to measure, but as you achieve these smaller goals along the way, they will give you a moral boost to keep going further.

Your personal goals can be anything. You may want to improve your work/life balance, eliminate debt, save more money, take the family on a vacation or simply improve your physical fitness.

Setting a goal now, will help you get there in due time.

2. Set Business Goals

As a small business owner, you know you are tight on time. I know that most days, I wish the day had more hours in it. Despite that as an entrepreneur, you have a billion things to do, it is essential to set goals for your business.

Much like personal goals, setting small goals is key. This gives you the ability to easily measure and adjust your journey along the way towards your goal.

I know setting goals is sometimes difficult, but one way that has worked well for me to set goals is through the use of the S-M-A-R-T steps.

S – Specific

M – Measurable

A – Attainable

R – Realistic

T – Time Measured

By using the above SMART method, I ensure that my goals are realistic as possible. Why set a goal, if you know it will be impossible to achieve.

An example of a SMART goal would be, “I want to acquire one new client by the end of next month through referrals from my current customers.”

3. Develop a Marketing Plan

Part of developing a marketing plan is understanding who you’re targeting and what you want to sell to your intended target. You don’t need to be a marketing genius to create a marketing plan. Looking at your target market’s needs and creating a custom marketing effort to that audience will ultimately give you the best return on your marketing dollars.

All you need to do is define who your customers are in terms of demographics (age, gender, occupation, income), geographical ( your city/district/province), and behaviours (their attitudes, values, interests, and benefits sought).

Once you know who you are targeting, it’s easier to determine what products and different price points you will offer.

4. Get In Touch With Your Customers

Keep in touch with your customers. Did you hear that? Keep in touch with your customer. All the time. A phone call, a small thank you note, a quick visit or email will go a long way.

Thank your customers for their valued support and address any of their needs, concerns or wants.

Please avoid sending mass general mass emails or cards. They are so cheesy and such a turn off. Anytime I get one of these, they go straight to the garbage. Make your email personalized as possible. If you’re sending a card, write a hand written note.

Work hard to keep your customer happy and the relationship as live as possible. We all know what happens to poorly managed relationship – they end before they’ve begun.

Good Luck in 2012 and may all your goals, wants, dreams and desires come true.

Cheers!
Eddie

How I Started My Cleaning Business

As a teenager I used to clean offices alongside my parents. I enjoyed doing the cleaning. Despite not getting paid a lot (only was helping my parents) cleaning gave me a good perspective on running a business. Furthermore, I took pleasure in the ability to see a job complete – start to finish. We would arrive at a cleaning location and the office would be a disaster. A short time later, the office would be sparkling clean, fresh smelling and ready for the next work day.

We cleaned offices as a family for years. And earned a pretty good passive income with commercial cleaning. Hands down it was quick and easy cash. We were getting paid to clean someone else’s mess and we didn’t mind it one bit. Historically as a family, we are neat freaks. Sort of anyways.

Eventually my parents grew older and I started my post-secondary education, so we gave it up. We just didn’t have the time anymore. After all was said and done, I think we spent well over eight years cleaning offices, warehouses and various other commercial locations.

Ten years later!

Fast forward ten years later, I opened up my own cleaning business. And with good reason too. I was looking to make extra cash on the side and my father just lost his job after 17 years. He was a cabinet maker and the company closed it’s doors. Recession hit and tough times came along, so the company closed it’s doors.

The family was on a tight budget and additional income was needed. So, I decided to start a cleaning business.

I knew deep down inside that it would work well for my father. He already knew how to do clean and cleaning it self was not a tough job for a 55 year old man. The long and short of it, my father also became my first employee.

So, now that you know a little background and why I started my cleaning business, let me break down what you will need to start your own. And one thing that you DON’T NEED is money.

1. Registering Your Business

Since my business is based in Ontario, Canada, I ended up visiting Service Ontario to register my business. It’s a very simple process, which costs $75 (save your receipt to write it off at year end). You pay the $75, register your business name and you’ll get a business license registration, which is good for five years. I’m sure in other provinces across Canada the process might be slightly different, but it’s all very similar.

Register Your Cleaning Business In Other Provinces:

  1. Ontario – Service Ontario
  2. Manitoba – Province of Manitoba Business Registration 
  3. Saskatchewan – Register Your Business 
  4. Alberta – Service Alberta
  5. British Columbia – BC Business Registry
  6. Nova Scotia – Access of Nova Scotia 
  7. New Foundland – Registry of Companies 
  8. New Brunswick – Service New Brunswick

2. Open Up a Business Bank Account

Opening up a business account is fairly simple and straight forward. Since I do most of banking with RBC, it only made sense for me to open up my business account there as well.

There are many different business accounts out there, however if you’re unsure of which one to go with, use this business account selector to help you narrow your choice.

Finally you will also need the following to open up a business account (sole propreitor):

  • Two pieces of ID
  • Trade name registration or master business license
  • Your signature

Once you open up a business account (it takes less than an hour), be sure to ask for some free business checks to get you started. It’s FREE.

3.  Business Cards

I’ve used Juke Box printing services for a few different business cards and every time they get it just right. They are professional, on time and mostly cost effective. You definitely get your bang for your buck.

Rather than boring you further with how I started my cleaning business, I will wrap it up shortly. I promise.

I can promise you that the process is simple and straight forward. You don’t need to know everything, you just need some balls to finally get started. Essentially you got everything to gain and nothing to lose by starting your own commercial/home cleaning business.

And if you’re ever unsure about anything, don’t hesitate to shoot me and email. I created the contact page for a reason – so you guys can contact me.

Cheers!

PCI