Start a Cleaning Business in Arkansas

The state of Arkansas is located in the southern region of the United States. Arkansas has connecting boarders with six states, with its eastern border largely defined by the Mississippi River. Its different geography ranges from the mountainous regions of the Ozarks and the Ouachita Mountains, which make up the United States Interior Highlands, to the eastern lowlands along the Mississippi River. The center and most populous city is Little Rock, located in the central portion of the state.

As of the year 2006, Arkansas has an estimated population of 2,810,872, which is an increase of 29,154, or 1.1%, from the prior year and an increase of 105,756, or 4.0%, since the year 2000. It includes a natural increase since the last census of 52,214 people (that is 198,800 births minus 146,586 deaths) and an increase due to net migration of 57,611 people into the state.

There are Immigrants from outside the United States resulted in a net increase of 21,947 people, and migration within the country produced a net increase of 35,664 people. It is projected that about 48.8% is male, and 51.2% is female. From the range year of 2000 through 2006 Arkansas has had a population growth of 5.1% or 137,472 and the population density of the state is 51.3 people per square mile.

Economy

The state of Arkansas has a gross domestic product for 2005 was $87 billion. And its per capita household median income (in current dollars) for 2004 was $35,295, according to the U.S. Census Bureau. The Arkansas agricultural products are poultry and eggs, soybeans, sorghum, cattle, cotton, rice, hogs, and milk. Its industrial products are for food processing, electric equipment, fabricated metal products, machinery, paper products, bromine, and vanadium.

Some global companies are headquartered in the northwest corner of Arkansas, including Wal-Mart (the world's largest public corporation by revenue in 2007) and were the JB Hunt and Tyson Foods. This center area of the state has experienced an economic boom since the 1970s as a result.

There are many automobile parts manufacturers have opened factories in eastern Arkansas to support auto plants in other states. Furthermore, the city of Conway is the site of a school bus factory.

Taxation

The state of Arkansas imposes a state income tax with six brackets, ranging from 1.0% to 7.0%. The tax ranges with the first $9,000 of military pay of enlisted personnel is exempt from Arkansas tax; officers do not have to pay state income tax on the first $6,000 of their military pay.

The privilege of retirees pays no tax on Social Security or on the first $6,000 in gain on their pensions (in addition to recovery of cost basis). People of Texarkana, Arkansas are exempt from Arkansas income tax; wages and business income earned there by residents of Texarkana, Texas are also exempt.

The state of Arkansas's gross receipts (sales) tax and compensating (use) tax rate is currently 6%. The state itself has also mandated that various services be subject to sales tax collection. Which include wrecker and towing services; dry cleaning and laundry; body piercing, tattooing and electrolysis; pest control; security and alarm monitoring; self-storage facilities; boat storage and docking; and pet grooming and kennel services.

In relation to the state sales tax, there are more than 300 local taxes in Arkansas. All cities and counties have the authority to enact additional local sales and use taxes if they are passed by the voters in their area. These local sales taxes have a ceiling or cap; they cannot exceed $25 for each 1% of tax assessed.

With these additional taxes are collected by the state, which distributes the money back to the local jurisdictions monthly. While the low-income taxpayers with a total annual household income of less than $12,000 is permitted a sales tax exemption for electricity usage.

The sales of alcoholic beverages account for added taxes. A total of 10% supplemental mixed drink tax is imposed on the sale of alcoholic beverages (excluding beer) at restaurants. With 4% tax is due on the sale of all mixed drinks (except beer and wine) sold for "on-premises" consumption. And additional 3% tax is due on beer sold for off-premises consumption.

All property taxes are assessed on real and personal property; only 20% of the value is used as the tax base.

Starting Your Cleaning Business in Arkansas

The success of a cleaning business requires a process and strategy to learn about. Here are some steps to have an initial overview on how to start a cleaning business:

  1. Plan the business-Planning and setting up is critical to successfully starting and building a business. You have to find guidance on the tools and resources necessary to write a winning business plan. Have a sample plans to a business plan primer; we’ll get you started on this very important activity. When your business is up and running you’ll need to regular review and update your plan to manage growth.
  2. Start your business-Opening a business requires you to complete a number of steps and make some key decisions. Though this is a part of your overall plan, you’ll need to select a location, decide on a business structure, and obtain the necessary licenses and permits. In addition to this, determining which financing options will meet your short-term needs and long-term goals is crucial. Within this step, you should have information on these topics along with guidance on buying an existing business, copyright and trademark issues, and getting support from an outside expert.
  3. Find a mentor-You can not do it alone! This is the best way to insulate yourself against business failure to find and work with a mentor, someone with business experience who can guide and assist you.
  4. Finance start up- All businesses and company require some form of financing. This is an integral component of starting a successful business to raise sufficient capital. There are lots of challenges here, but numerous resources are available to help you. You have to determine the following:

    • Start Up Costs-estimate your specific cash needs at different stages of development to launch your business venture.
    • Estimating Costs-determine how much money you will need for at least the first several months.
    • Breakeven Analysis- this is a tool to determine when a business will be able to cover all its expenses and begins to make a profit.
    • Financing Basis-this is a basis for capital management and set for available financing alternatives.
    • Equity Capital- this is money raised by a business in exchange for a share of ownership in the company.
    • Debt Capital-is always represented by funds borrowed by a business that must be repaid over a period of time, usually with interest.
    • Angel Investors-Business “angels” are high worth individual investors who week high returns through private investments in start-up companies.
    • Venture capital- provides businesses a financial cushion or security collateral before they will lend to a small business.
    • Surety Bond-it serves as a three-party instrument between a surety, the contractor and the project owner.

Four types of contract bonds:

Handling Finances

Because of the enormous growth in personal wealth over the past two decades, there are now more funding opportunities than ever for entrepreneurs. The fast development of the Internet has made finding investors and lenders easy, but the legal issues involved in business financing are complex and should always be reviewed by a qualified attorney.

First You Should Know Your Options

  1. Lines of Credit - this is a credit loan designed to provide short-term funds to a company in order to maintain a positive cash flow. Hence, as funds are generated later in the business cycle, the loan is repaid. The majority commercial banks offer a revolving line of credit, where a fixed amount is available.
  2. Conventional Business Loans - this is a traditional loans, called long-term debt, are often popular initial financing venues for businesses competing in a proven field. These lenders include government-sponsored lending programs, commercial banks, and small business investment companies.
  3. Business Alliances - this is an arrangement between two or more companies to pursue a common business objective, such as a joint venture, merger or cost-sharing plan.
  4. Angel Investors - these are business owners or independently wealthy individuals that finance businesses in exchange of equity.
  5. Asset-Based Financing - it is a system in which lenders accept the assets of a company as collateral in exchange for a loan.
  6. Venture Capital (VC) - this investment was based on projected future potential. You should have a qualified lawyer to any investment deal between VC’s and your company.
  7. Investing in Someone Else's Business – this can be a great opportunity, a good investment or a way to develop a potential customer.
  8. Personal versus Business Finances - before going into business it is always wise to get your finances in order. This is the best idea to check your personal credit situation. Any problem on your personal budget will put the financial success of your business at risk.
  9. The Benefits of Making Your Banker Your Friend – a good relationship with the banker can bring your money in a form of credit, save you money in fees and enhance your business opportunities through taking advantage of the banker's extensive personal contacts.
  10. Borrowing Money – this is the common source of funding for a small business, but obtaining a loan isn't always easy.

Name your business

There is always more to naming your business than just coming up with something that sounds good and you happen to like. Even thought must be given to state and local requirements and making sure you don’t infringe upon the rights of someone else’s business name. You will need to create a name for your cleaning business. A name should be able to captivate customers’ attention and interest to what service or product that you want to offer. It must be easy to remember, easy to pronounce and would create lasting impression.

Legal Requirements and Implications

Choosing a name for your business requires much more than just creativity and a working knowledge of your target market. First thing, you’ll need to decide which business structure you will use, since each structure has its own peculiarities. A good example is that, many states require a sole proprietor to use their own name for the business name unless they formally file another name as a trade name, or fictitious name.

Usually, you will need to determine whether your trade name will be the same as the full legal name of your business. This to determine of equal importance in finding out whether your name or a very similar name is being used by another business, and if so, what rights they may or may not have to use the name in the area where you do business. Always remember that some businesses only file trademarks within their locality, so it's possible that the same name can be used elsewhere.

Search and Registration

Brand or Trade names can be registered through state Secretary of State offices, and for wider marketplace protection, through the United States Patent and Trademark Office (USPTO Trademark Search). All businesses should first use the USPTO's online system to search all state and federal trademark registers to see if their proposed name is being used.

Domain Name

For businesses, websites are popular tools for marketing business as more and more people look at the internet for business opportunities. People explore the internet for whatever services or products they need to get. Establish a website will help your house cleaning business a great deal. The domain or trade name can be registered through online businesses that will let you purchase a chosen name after checking that it is not taken yet.

Your cleaning venture or business will make money only if it has many clients. Concerning as the owner of a cleaning business is to see to it that you attract a number of clients to sustain your business operations and realize profit at the end. Every decision on how to run the cleaning business is yours to make including the decision on how to generate a wide client base.

There are various ways of attracting customers to your business. First thing is by advertising in the local newspaper; another is by giving out flyers or posting announcements in community bulletin boards. You can make use of other activities that will spread the word out into the community about your cleaning business. All these business approach are effective in getting clients to your cleaning business but nothing can beat a business website.

Most of the businesses today realize the need to own a website as many customers search the web for information on anything that they need to buy or any service that they want to avail of. Some people or individual no longer search the yellow pages anymore for information on a particular type of business they want to check - they do the search in the internet. But if a person needs somebody to clean his house or building, he will go online where he can use a search engine to give him several websites of cleaning companies. The most striking website that he will find will catch his attention and most likely, he will be inquiring from this company about the cleaning services they provide.

The most important is that the website for your cleaning business be impressive the first time anybody opens it. It must appear professional and serious, and not one that looks like it was done by a kid. You should design your website in such a manner that it will get people's attention. Optimization has a great impact of your website by having keywords and phrases so that it can be turned out easily by search engines.

While your company is cleaning and the services you are offering are in line with cleaning, there should be a lot of mention of the word cleaning in your website. With this, your website will come out in the searches conducted by people who are looking for cleaners.

The layout or profile for your cleaning business website must be well-designed so it can attract clients and ensure repeat customers also. The website profile design must target the market segment that you have in mind, be it big business or small business. You also publish your price or charge range in accordance with the kind and quality of service that you offer. If your charge range is set for the high-end market, you cannot expect the low-end market clients to patronize your business. Your website profile and layout will clearly define your target market by the design you are going to make.

Registration of Business Name

In Arkansas, any sole proprietorship or general partnership operating under a name other than the owners must file a "Doing Business under an Assumed Name Certificate".

Aside from it all domestic and foreign corporations must file an Application for Fictitious Name with the Secretary of State. These domestic corporations must also register with the county clerk of the county in which the corporation's registered office is located (unless it is located in Pulaski County). The collectible Fees vary depending on entity.

Legal Structure of your Cleaning Business

The reasonable payment or amount of taxes a business has to pay will depend on what type of business structure it has. In addition, different types of business brings about different the amount of personal liability you will have in the business. Over individual exposure in a business undertaking could wipe you out entirely in the event of business failure or when confronted with massive liability payments arising from some accidents.

It is consequently important for a start-up businessman to spend so much time and thought before finally deciding on the legal structure for his cleaning business.

A business or company could have any of the following legal structures:

Employer Identification Number

The employer or owner must have an Employer Identification Number (EIN) which is known as a Federal Tax Identification number that is issued to identify a business entity. It is issued by the Internal Revenue Service as Employer Tax ID and Form SS-4.

Arkansas State Taxes

Businesses located and operating in Arkansas must register under the Gross Receipts Tax Law if the business sells property or services subject to sales tax. All sales tax is levied on sales of tangible personal property and various types of services performed within Arkansas. An accomplished application for a sales tax permit and a Fifty Dollar ($50) nonrefundable fee is required to register new businesses.

A 6 percent state sales tax must be collected and remitted to any applicable city and county sales taxes. With this, a sale tax is applied to a supplemental mixed drink tax of 10 percent is imposed on the sale of alcoholic beverages (excluding beer) at restaurants. And an additional four percent tax is due on the sale of all mixed drinks (except beer and wine) sold for “on premises” consumption. Aside from it, there is a 3 percent “off premises” tax on retail sales of both liquor and beer. In addition, there is also a short term and long term rental tax, vehicle rental tax, aviation tax, and tourism tax.

Getting an Arkansas Business License

Here are the states requirements just like with the other States in America. While other business licensing requirements vary from state to state, some of the more common types are listed below.

These state regulations are not meant to make life difficult for businessmen rather it is also a form of protection for them. By following these regulations in running a business, the business owner can avoid costly litigations involving injuries, damages, and accidents that may involve a large sum of money when it comes to medical costs.

It is very convenient that you are licensed to do business and you adhere to the regulations, the unnecessary expenses can be eliminated thus giving your business more clients and bigger income.

The common interest of prospective clients will be looking for is your business license as people are very reluctant to deal with unlicensed contractors. Operating a business without permits or licenses will not give anybody the confidence of entrusting his house or property to some unknown cleaners who will be going in and out of their house.

  1. Business Licenses

    A state of Arkansas business license is the main document required for tax purposes and conducting other basic business functions. More states have established small business assistance agencies to help small businesses comply with state requirements. There are similar guidelines to follow and there will be limitations to be observed. Because you are offering cleaning services to the public, all your services and activities will have to be regulated by the government. For permit application you can visit this site http://www.arkansas.gov/dfa/excise_tax_v2/et_su_forms.html.

  2. Occupations and Professions

    The state of Arkansas licenses are frequently required for occupations as varied as building contractors, physicians, appraisers, accountants, barbers, real estate agents, auctioneers, private investigators, private security guards, funeral directors, bill collectors, and cosmetologists. Since then that you can't always guess which occupations and professions are licensed by your state, you should always check with your state licensing authorities.

  3. Licenses Based on Products Sold

    Other state licensing requirements are based on the product sold. Like most states require special licenses to sell liquor, lottery tickets, gasoline, or firearms. With your cleaning services you have to contact your state licensing authorities to determine the licensing requirements of your business.

  4. Tax Registration

    In Arkansas, this state operates and has a state income tax, you'll have to register and obtain an employer identification number from your state Department of Revenue or Treasury Department. You can file online with cleaning business appropriate tax to this site http://www.artax.org/.

  5. Trade Name Registration

    This appropriate to cleaning business that will only be operated in your local community, registering your company name with the state may be sufficient.

  6. Employer Registrations

    This required for employee’s registration, you'll probably be required to make unemployment insurance contributions. For more concern and detailed information always contact your state Department of Revenue or Department of Labor.

Operating a Business in Arkansas

You have your small business after countless hours of deciding on the nature of services you will offer. You have made decisions on the most efficient and cheapest suppliers and you have set up the best possible operation for your business. But always bear in mind that you have to know your customers.

All your investments, both in terms of money and efforts, will be wasted if your business will not have a strong customer base. A drop of customers will not sustain your business operations hence it is necessary to expand on what customer base exists at the moment.

Your market base can be expanded through the following:

Conclusion

Successfully handling and managing a cleaning business in Arkansas requires specific management skills in addition to knowledge of key business practices. Within this information you'll learn about decision-making skills, and how to start a cleaning business. Additionally, we'll walk you through a host of important topics to manage your business including: marketing basics, registration, filing your business taxes, legal considerations, forecasting for future growth, and financing options.

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