What Licenses Are Needed to Start a Cleaning Business: A Comprehensive Guide

Understanding the Basics of a Cleaning Business License

What licenses are needed to start a cleaning business​? Business licenses are there to prove that you are a legal business and that you are certified or licensed to provide specific cleaning services. 

There are three levels to the cleaning business license requirement list:

1. Federal cleaning service business license requirements, which have namely to do with taxes

2. State-level cleaning business license requirements which vary from state to state

3. Local licenses which vary from one city or county to another

So, what license is needed to start a cleaning business? 

1. Business License

The first step is a business license. This is based on the legal structure you choose. A sole proprietor doesn't have to register with the Secretary of State, but all other businesses do, including an LLC or corporation. 

This grants you general authorization to operate a business within a specific jurisdiction. What are the steps to apply?

In most cases, you:

1. Choose the legal structure for your company

2. Register the company name in the state you have chosen (the name cannot already exist)

3. Register your business. 

Registration requirements are based on the legal structure. An LLC, for example, needs Articles of Incorporation or Articles of Incorporation. 

The cost varies, too, by type and state. This process is typically a few hundred dollars or so, with only a few weeks of registration before you are off to the races. 

Once you have your business license, you can expect to renew it annually. 

A sole proprietorship is different, as mentioned. If you are operating under your name, using your taxpayer information, there aren't other steps involved, but if you want to operate the business under a different name, then you need to file a DBA form (Doing Business As). This gets filed with the Secretary of State and secures your fictitious business name. 

2. Cleaning Service Business License

Then, there are tailored licenses for cleaning services, if applicable. These are rare, but some local or state agencies issue these licenses and require your business to adhere to health and safety regulations. 

Depending on the state in which you operate, your business license might have additional requirements. In Ohio, for example, if you plan to work from a single office or location, you get a county business license for that county. However, if you plan to operate from multiple locations or without a fixed location moving from place to place, you need a transient vendor's license.

3. Special Permits and Certifications

More often required are special permits and certifications. These apply to situations where you are:

1. Handling or disposing of hazardous material (such as cleaning services for a hospital or factory)

2. Handling or disposing of cleaning chemicals

3. Cleaning pools

In these cases, you often need specific permits that require you to complete classes beforehand. These classes teach you the proper way to handle things like hazardous waste, needles, or chemicals. You also learn how to dispose of them properly. These are especially relevant for businesses offering sanitation services.

You can complete optional certifications that can enhance credibility and client trust too. 

4. Employer Identification Number (EIN)

If you are anything other than a sole proprietorship with no additional employees, you will need an EIN or Employer Identification Number. This is also needed to apply for business loans, get business credit cards, or open business bank accounts. Even if you have a sole proprietorship or you are the only person within your LLC, it can help keep business and personal finances separate. 

A step-by-step guide to acquiring an EIN through the IRS:

1. Complete your application in a single session (you can't save it and come back to it)

2. Print the EIN confirmation letter for your record-keeping

If you are forming a legal entity, you must form the entity with the state before you apply for your IRS EIN. You can apply online, by mail, fax, or over the phone with the IRS. 

You will need:

• Your business entity type

• SSN or taxpayer ID for the responsible party

• Signed authorization if you are a third-party designee

Once you have your EIN, you can hire employees, pay sales tax, change your business structure, operate a partnership or corporation, and administer things like retirement plans. 

5. State-Specific Licenses 

Each state has specific licensing requirements and these can vary not just by state but by city. In Cleveland, for example, you not only need a business license and any relevant special permits and an ein, but you need a City of Cleveland business license the same as Columbus requires a city of Columbus business license. 

In Texas, Dallas, Houston, San Antonio and Lubbock require additional measures like a DBA certificate filed with the county clerk in Houston or a certificate of occupancy filed in San Antonio.

You can start here to register your business and find official state websites or resources for accurate information.

Step-by-Step Guide to Obtaining Licenses

When it comes to obtaining the right licenses, you need to determine which licenses are needed based on business scope and location. Start with determining where you plan to operate and work backward from there with local, state, and federal requirements. Once you have this list, you can start reviewing the order in which things have to be done, like the state-level business registration before the EIN and before the local licenses and special permits. 

What are the most common documents needed for these steps?

• Identification 

• Proof of address

• Business plan

• Any previous registration information

• SSN

When you get ready to fill out your applications accurately and efficiently, go slowly and methodically. Use online applications where possible so you can print a copy and review it before you submit it. Once you submit documents, keep a copy for your records too. 

The typical costs associated with each license vary by state, but you can expect around a few hundred dollars total for the average small business. 

The best way to manage your application timelines and avoid delays in starting the business is to know all of the licensing requirements before you start any application and then decide which applications have prerequisites. You can even make a spreadsheet of this, laying out a column for prerequisites (like a state business license before an EIN application) so you can see the right order. 

Common Challenges and Solutions

Some of the most common challenges have to do with not getting applications done in the right order. Here, again, the best way to handle complex licensing processes and multiple agencies is to have a checklist for the area where you plan to operate. It can even be helpful to work with an agency that specializes in startup resources and guidance for cleaning businesses. 

If you are looking to budget for licensing fees without straining startup finances, focus on the minimum requirements. For example, if you are currently a sole proprietor and don't plan on changing for at least one year, you can start saving during that year for the licensing requirements to change your business structure in the future. 

It is equally important to keep your licenses current. Best practices for maintaining compliance post-licensing, including renewals and updates, is to add reminders to your calendar and set up a schedule for required renewals, including setting aside money for renewal costs. Make these notifications around three months in advance so you have time. 

If, for some reason, your license application is denied, there are typically appeals and corrections opportunities. This is based on the reason for the denial. Sometimes, things are denied because you didn't complete the prerequisites and other times, you were denied because there was a mistake on the form. Take your time to review why a form was denied and resubmit when possible. 

Summing Up

What license is needed to start a cleaning business? State-specific licenses, EINs, special permits and certifications, and business licenses. Take the necessary steps today to confidently establish the legality of your cleaning business. Download a checklist, consult with a legal expert, or start your licensing applications today.