Question: |
Do you know what the average
income is for a cleaning business? |
Answer: |
It's really hard to pinpoint an average.
A cleaning business can grow as large
as you allow it to grow. There are multi-million
dollar cleaning businesses, and there
are businesses grossing $80K a year.
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We have personally known individuals
who have been running a cleaning business
by themselves for over 10 years who
never seem to break the $90K mark. |
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But then we have also known individuals
who have started off cleaning by themselves
and have grown to be multi-million dollar
businesses within a couple of years. |
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So what's the difference? Why do some
businesses tick along at the same rate
for years, while others seem to grow
in leaps and bounds? Well a lot of it
comes down to the business owner. |
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There are many qualities that any
successful business owner needs to have.
Such as good leadership skills, flexibility,
intelligence, business-savvy and the
ability to make good use of technology. |
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Question: |
Should my cleaning business
be a Corporation or an LLC? |
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The type of business you should form
depends on several things. How you file
your taxes will be different depending
upon what type of entity your business
is, and also your responsibilities and
liabilities will be different. |
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These things also vary from state-to-state
and sometimes even for your local government,
so you should definitely consult with
a local tax advisor to find out what
type of company you should start. |
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The most common type of company for
startup cleaning businesses is a Limited
Liability Company (LLC). Once your business
gets to a certain size, it may be more
beneficial to be a Corporation as it
reduces your liability. |
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Sole Propriotorship
or Partnership |
Limited Liability Company
(LLC) |
Corporation |
Basic
Idea |
No legal distinction between
the owner and the company. All
profits and losses accrued by
the business are the owner's responsibility. |
Offers limitied liability like
corporations have. Taxes are still
shown on the owner(s) income tax
returns. Sometimes, the LLC can
pay its taxes as if it were a
corporation. |
A legal entity separate from
the company owners. |
Startup
Costs |
Typically lower. |
Slightly higher. |
Higher. The procedures for starting
a Corporation are a bit more involved
and you should definitely consult
both a tax advisor and a lawyer. |
Taxes |
Self-employment tax. |
Personal income tax return or
sometimes as a corporation. |
Corporation Tax Return 1120. |
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For more detailed descriptions of
the above entities, search on http://www.wikipedia.org |
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Question: |
How do I actually start the
cleaning business? What forms do I have
to file to start the cleaning business? |
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Well the forms you have to file depend
upon what type of business you want
to start and what state you're in. If
you just Google "start a business
in Florida", for example, you will
probably find your way to the right
place. These days most state web sites
have the appropriate forms available
for you to download online, which you
can complete and mail in. |
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The person who asked this particular
question is in Florida. For Florida,
you need to visit the web site for The
Florida State Division of Corporations
at http://form.sunbiz.org |
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The form you need to complete to form
an LLC in Florida is: http://form.sunbiz.org/pdf/cr2e047.pdf
or to form a Corporation is: http://form.sunbiz.org/pdf/cr2e010.pdf |