According to a recent British Cleaning Council report, the cleaning industry contributes over £24 billion to the UK economy while employing over 700,000 people. The number of new cleaning businesses increased 12% between 2014 and 2015, with growth in the industry set to continue. This includes the domestic market, where an increase in the number of dual-income families and the fact that people are working longer hours drives the growth in demand for cleaning services. People simply have less time to clean.
So cleaning is an expanding industry and there are plenty of opportunities to get involved. Great news if you’re thinking of starting your own cleaning business!
The cleaning industry
The market is largely made up of small businesses, with 72% of UK cleaning staff working for companies that employ no more than nine employees. A third of all cleaning businesses are owned and run by a single person.
It’s relatively simple to set up a cleaning business but if you’re planning on doing so, you must ensure that you’ve considered the myriad legal issues.This is especially true if you’re considering starting an After Death Cleanup Service Miami. Given the sensitive and potentially hazardous nature of this industry, you must ensure that you’ve considered the legal issues specific to biohazard cleanup, such as compliance with local and federal regulations, proper licensing, and adherence to safety standards. With that in mind, we’ve put together a simple beginner’s guide to some of the legal implications to consider when setting up your business, especially in a field like post-death cleaning services.
What sort of business should you set up?
When establishing your cleaning business you’ll find there are a few different business structures to consider. Each has their own benefits and drawbacks, and which one you choose will depend on your situation and what you want to achieve.
Sole trader: a sole trader describes any business that’s owned and controlled by one person (although as a sole trader you can still employ workers). This is the easiest business type to set up as sole traders do not have a separate legal existence from the company. In the eyes of the law, the business and the owner are the same. And this is where the drawbacks lie, as the owner is personally liable for the firm’s debts and may have to pay for losses made by the business out of their own pocket.
Fortunately, domestic cleaning businesses in particular are unlikely the rack up significant debts and as this is the easiest option when first setting out, many cleaning businesses operate as sole traders.
Partnership: a partnership is a business that’s owned by two or more people. Cleaning businesses aren’t usually partnerships and this setup is more commonly used by doctors or lawyers. As a partnership, the business is under shared ownership so decisions have to be made together, which may cause conflict if the partners wish to take the company in different directions. Each partner has unlimited liability (as with the sole trader option), so you and your business would be treated as a single legal entity.
Limited company: a limited (LTD) company is an incorporated business, meaning it exists as its own legal identity and can own assets. The ownership of a limited company is divided into shares and whoever owns one or more of these is called a shareholder. The shares can be sold privately (this would be a private limited company) or they can be sold on the stock market (a public limited company). Small businesses are often private limited companies. Due to limited companies having their own legal identity, their owners have limited personal responsibility for the firm’s debts. This is a major advantage of this type of business legal structure, despite it being more complicated to set up.
Franchise: franchising is where you buy into someone else’s business, such as professional home cleaning company Molly Maid. As a franchisee, you’d pay for a license to operate under the franchisor’s marks. Think of McDonald’s – almost all of their restaurants are owned by third parties operating under the McDonald’s brand.
The great thing about this model is that some of the hard work has already been done, as the brand has been built and supplier relationships will already be in place. The biggest drawback to operating as a franchise is that you don’t have as much freedom to make decisions, as you must follow the terms set out by the franchisor. That said, the higher costs of becoming a franchisee can be outweighed by the benefit of a strong, trusted brand that consumers recognise.
Make sure you do your research into different franchise opportunities if this is the model you’d like to follow – you need to make sure you can make a healthy return on your investment!
Make sure you’re insured
When setting up a cleaning business you’ll need some form of insurance. As you’ll be operating on customers’ premises and dealing with potentially toxic and hazardous materials, you’d likely want the peace of mind that you’re covered when operating on customer sites.
There are three main insurance policies to look into…
Professional indemnity insurance: this type of insurance can cover unpaid client bills, costs involved in rectifying mistakes that you might make and any fees paid to resolve customer complaints. It also offers protection against malicious acts by employees, defamation, infringement of intellectual property rights, negligent misrepresentation and loss of documents or data. There are many potentially damaging scenarios that this insurance will cover and you should consider it fundamental when setting up your business.
Public liability insurance: this covers your business should you or an employee cause death or injury to someone, or damage their personal property. Imagine one of your cleaners knocked over a priceless vase in someone’s home or damaged a super expensive sofa – having this insurance would give you peace of mind that an accident isn’t going to cost you the Earth. Make sure you read the policy smallprint before taking out cover so that you’re confident that appropriate for your business.
Employer’s liability insurance: essential if you’re hiring employees, this covers the compensation payable should an employee be injured or become ill as a result of the work they do for you. Make sure you have suitable risk assessments and procedures in place to minimise the likelihood of an accident, as a safe working environment is a must for any business.
This is just an introduction to business insurance and depending on the size and type of your business, there may be other insurance that you’re required to purchase. Make sure you research the policies offered by different insurers to get the best fit for your business.
Employing staff
When employing staff there are a huge number of factors to consider, as the relationship with your employee is governed by numerous different laws and acts. A good place to start is by asking the following questions:
- Can your staff legally work in the UK?
- What are you going to pay staff? (Make sure you pay at least the minimum wage!)
- Do you have a system in place for PAYE?
- Do you have contracts of employment in place?
- Is a DBS check required?
Ensure that before you employ your staff you consider all your legal requirements and remember that your obligations may differ depending on what type of business model you use.
A cleaning company should be a fairly simple business to run and a relatively cheap one to set up, but there are always challenges to face when setting up any business – not least the legal implications.
Hopefully this article has provided you with some insight as you begin your journey as a new business owner.