Starting a cleaning business in California: the setup checklist

This is general information from experience running and building for service businesses, not legal, tax or insurance advice. Confirm the specifics for your county and situation with a professional.

1. Decide what you actually sell first

Residential recurring, one-time deep cleans, move-outs, vacation rental turnovers and commercial janitorial are five different businesses with different customers, schedules and margins. Pick one to start. You can add the others once the first is predictable.

2. Entity and registration

• Sole proprietor is cheapest and simplest; an LLC adds a liability layer and costs an annual state fee.
• File a fictitious business name statement with your county if you trade under a name that is not your own, and publish it as your county requires.
• Get an EIN from the IRS — free, takes minutes, and keeps your SSN off paperwork.
• Register with the city for a business license or tax certificate where required.

3. Insurance before your first paid job

• General liability — most commercial clients and many residential ones will ask for a certificate.
• A janitorial or care/custody/control endorsement, since you are handling customers' property.
• Workers compensation as soon as you have employees; in California this is not optional.
• Commercial auto if a vehicle is used for the business.
• Consider bonding — it is inexpensive and it is a line customers look for.

4. Money plumbing

1. 01A separate business bank account, from day one, no exceptions.
2. 02A card used only for business expenses.
3. 03Bookkeeping software from the first transaction, not from your first tax panic.
4. 04Set aside a fixed percentage of every payment for taxes, automatically.
5. 05Pick how you get paid — card on file for recurring work will save you many hours of chasing.

5. Employees vs contractors

California's worker classification rules are strict, and cleaning crews working your schedule with your supplies generally do not qualify as independent contractors. Misclassification penalties are severe. Talk to a payroll service or an employment attorney before you hire your second person — it is cheaper than fixing it later.

6. Price before you advertise

Work out your true hourly cost including unbillable time, add the margin you need, and write down your rates. Going to market with a number you invented on the spot is how three-year underpricing starts.

7. First customers

• Everyone you know, told plainly and once, that you have started.
• Local neighborhood groups, where allowed, with photos rather than a sales pitch.
• Realtors and property managers for move-outs and turnovers — high volume, steady.
• A claimed Google Business Profile, filled out completely.
• Two or three reviews from your first jobs, asked for the same day.

8. The systems to start with, and the ones to wait on

Start with: a way to take quote requests when you are working, a customer list, a schedule, and invoicing. Wait on: a CRM with a pipeline, marketing automation, an app. The first four fix problems you have now. The rest fix problems you hope to have.

9. Serve the customers who are already there

In much of Northern California a large share of the residential market speaks Spanish, and a large share of the crews do too. A website that presents itself in both languages is not a nicety here — it is the difference between being an option and not being one.