Starting a Cleaning Business in Maryland

  1. Cleaning Business in Maryland

    Maryland has a highly skilled civilian labor force comprising 3.0 million workers. The state also hosts the second highest concentration of professional and technical workers among the states, and has one of the highest proportions of doctoral scientists and engineers in the entire United States. Maryland has skilled laborers in the manufacturing sector, with experience in almost every type of industrial job. The state’s workforce is highly skilled but wages remain competitive, offering Maryland employers an exceptional value.

    Maryland civilian labor force totaled 3,000,000 workers in 2008. This number represents an 8% increase over the past decade. Almost 90% of them live within the Central Maryland region. This means that employers will find ample and available skilled workers to supply a wide range of industries.

    The state's workforce is highly industrious; 2/3 of the state's population 16 years and older is in the labor force. The state boasts also of a large number of female workers.

    Maryland plays a crucial role in transportation throughout the Eastern United States - and the nation. This is because of the state’s proximity and access to the Chesapeake Bay, the Atlantic Ocean, Washington, D.C. and all of the east coast’s major distribution routes.

    • A deep-water, inland port that handles more than 40 million tons of cargo every year.
    • Overnight trucking access to one-third of the U.S. population.
    • Six interstate highways that connect the State to every major market in the US.
    • Two Class I railroads - CSX and Norfolk Southern - and five short lines.
    • Three international airports within an hour's drive.

    Maryland has thirteen electrical utilities and four natural gas pipelines distributed by nine companies. On the east coast, the state’s electric rates are among the lowest, and reliable, on-demand energy is ensured by capacity-sharing programs.

    In the field of telecommunications, Maryland offers the digital and fiber-optic networks of the foremost international carriers. The state is home to a proven regional service provider and more than 250 long-distance carriers and resellers.

    In addition to the tax exemptions and credits the state implements, Maryland has:

    • No corporate franchise tax
    • No gross receipts tax on manufacturers
    • No income tax on foreign dividends (if the corporation owns 50 percent or more of the subsidiary)
    • No unitary tax on profits
    • No separate school taxes

    Maryland has often been referred to as "America in Miniature". Residents enjoy a wide range of lifestyles and activities within easy reach of the metropolitan areas. Each region of Maryland presents distinctly different styles and histories:

    • Central Maryland – features rolling hills, historic towns, and high-tech industries, and anchored by the City of Baltimore with its revitalized Inner Harbor and famous ethnic neighborhoods
    • Suburban Maryland - known for its fast-growing and innovative biotech companies, surrounds Washington, D.C. on three sides
    • Southern Maryland - the fastest growing region in the state, known for its maritime heritage
    • Western Maryland – with mountains, forests, fast-flowing streams, and the state's largest fresh water lake
    • Eastern Shore - still retains its rural flavor and quiet lifestyle but with robust farming country, quaint old towns, and fishing villages complementing a major seaside resort, Ocean City
  2. Starting a Business in Maryland

    Here we shall try to explain the steps in the process that most business owners will have to go through when establishing a business or starting a cleaning service in Maryland.

    1. Research and Plan Your Business: prepare your business plan that will help you become a successful cleaning business owner. Go to the Maryland Business Portal where you can find tools and resources to help your plan, start or expand your business.
    2. Get Business Training and Expert Advice: You can take advantage of free training and counseling services offered by the state in your community which include preparing a business plan start up, getting the needed financing for your business, and help with expanding and/or relocating your business. Ask also if they have available cleaning business training.
    3. Select a Location: Figuring out where to locate your cleaning business can be a tough challenge and its selection can spell the success or failure of your business. So where should you have your cleaning business located? Some experts will tell you that where you set up your business is very important to assure your success; some of them will say that it is not that vital. Its actual importance is dependent on the type of business, the facilities you require and where the potential customers are bases. For your cleaning business, the actual physical location takes secondary priority to whether or not the present facility itself is able to comply with what you need. But regardless of the type of business you have, whether retailing or service oriented, it is vital that you have a definite picture of the set up you should have and what you would like to get. It is also essential that you define what you will not tolerate unconditionally and how much you can pay for the startup.

      You can get advice about the right location and how to comply with zoning laws from the Maryland Department of Business and Economic Development through their search sites page.

    4. Finance Your Business: The money you need to invest in your cleaning business may not be enough so you would need some help to get started. You can learn about government guaranteed loans, grants, and venture capital from www.business.gov or you can also visit Maryland Department of Planning page for information about grants, so you can be well on your way to opening a cleaning business in Maryland.

  3. Getting a Business Name

    Any business needs a business name that will identify it from other companies operating in the same industry. Getting the right business name for your cleaning services could be both simple and complicated at the same time. There cannot be anything simpler than choosing any clever word to serve as your business name but also there cannot be anything more complicated than choosing a name that will stand out and convey the essence and objective of your cleaning business.

    The name you choose for your cleaning business must be easy enough to remember but should also be a definite and specific reminder of your business to the clients. It should be easily pronounced and should connote something positive that will push the potential clients to do business with you.

    But a caveat is in order: be careful that you don’t infringe on the trademark or copyright ownership of the name. You need to know if your chosen name is not protected by copyright or trademark laws. Never use a name if you are not 100% certain that it is not owned by somebody else. If you do, you may have to face painful payment reparations to the business name's original owner.

    You need to be cautious that your business name is not copied or is an imitation of an already existing and established name. A business name should not have embarrassing spellings or intentional misspellings that have the potential to be offensive. It should also not contain abbreviations that may imply profane or offensive meanings. Your business name should not have implied associations with groups that have nothing to do with your business.

    The right business name can be a valuable asset so great care must be taken in selecting and protecting it. However, you should not begin using a business name until you are sure you can use it. Visit the Maryland Business Entity Name Search page to search for available business names. It will help if you check telephone, business or trade directories, and other sources for business names that may seem confusingly similar.

    For further assistance in selecting a business name that will attract and keep customers, visit business.gov for their page on how to name your business guide.

    You may also engage the services of a trademark attorney who could handle the entire process in your name.

  4. Registration of Business Name

    Registering your business will ensure that the business name you have chosen cannot be legally used by another business. You will be more legally protected as you use your registered name and become publicly known by that name. Registration is required so that a comprehensive registry of all business and corporate information in the whole state is available for public reference. Registration also makes sure that the state has an orderly legal system and marketplace. Without business name registration, the public or other businesses that do transactions with other business may have no way of knowing the persons or entities with whom they are doing business.

    Registration provides public notice as to who owns or stands behind a business entity. If your business is not registered, you cannot file a lawsuit in court as a business.

    The Department of Assessments and Taxation registers companies that do business in Maryland, issues business charters, registers trade names and provides information on other corporate matters.

    - To obtain a Trade Name Application for "doing business as" (DBA), call (410) 767-1340.
    - For reservation of a business name for future use, call (410) 767-1340.

  5. Domain Name

    Having an online presence is one of the prerequisites of modern business. This is especially true if you are considering owning a cleaning business. People now almost automatically go to the Internet for whatever information they need. In this light, it pays to have a website for your cleaning business that your clients can access whenever they need someone to clean their premises.

    It is important that the domain name you select reflect your website or cleaning business. As much as possible, your domain name should also be your website name. This way, there would be fewer things your customer must remember to get to you on the web. Giving your website the same name as your domain is important since people think of its name when they think of your website.

    The domain name you want might not be available because somebody else has bought it ahead of you. You may have entered late into the game so others have beaten you to that name. So what are you to do? If you are really bent on getting it, especially if you already have an existing brand name or business that you own and have been known for it, you would probably do everything you can to get it. One option is to offer to buy the domain name from its owner. You can find out who the owner is by checking up the "whois" information available for the domain and get in touch with the person or company listed as the current owner. If they are willing to sell, be prepared to pay a bit more than if you are getting a new domain name.

    If you are just beginning in your business, try obtaining an available domain first, one that fits your business type and then name your website and business too, after the domain name you have bought. For example, you were able to buy the domain name "mycleaningbusiness.com, then you may name your business and website My Cleaning Business.

  6. Business Logo

    Your company can benefit from a logo that is appropriate for the image your company wants to project. It can also help your clients remember your cleaning service so that the first thing they think of when they need a cleaning service is your company. You can certainly count on the right logo to be one of your most effective marketing tools in promoting and expanding your cleaning business. Consider the following tips when getting a logo:

    • What are the value, creativity and quality you want your business to have.
    • Observe the type of logos your competitors use. What you want is a logo that will make you stand out from the other cleaning companies.
    • Make sure that the color palette and shapes you choose would elicit positive effects in your cleaning business.
    • Get the services of one (or several) good graphic artists who will design a logoyou’re you. Provide them relevant information about your business, its name and other important facts that the designer can use as basis for conceptualizing the logo design.
    • Show the finished logo to your family, friends, and potential clients and ask for their valuable opinions.
    • Revise the logo using the reactions and comments you have received as starting point.
    • Test your logo once more and revise as needed.
    • You can trademark the logo if you want.
    • Have business cards, letterhead, signs and packaging carry the final logo design.

    Tips:

    • You can help your clients associate the logo with your business by always adding your business name beneath the logo.
    • Not all logos need to be a graphic or picture icon. A graphically customized business name can also serve the same purpose
    • Make sure that you acquire all the legal rights for present and future use of your logo.

  7. Legal Structure of Your Cleaning Business

    The first step in the process of establishing your cleaning business in the State of Maryland is to determine which form of business structure is most suitable for your operations. The four most common forms of business structure are the sole proprietorship, partnership, corporation and limited liability company. Each structure has certain advantages and disadvantages that should be taken into consideration. The business structure you decide on will determine the legal requirements of your business. There are particular laws pertaining to the regulations that you as a cleaning business owner are required to comply.

    Once you have chosen the appropriate structure for your cleaning business, the next step is to complete the necessary registration requirements.

    You must register with the state of Maryland if your business is a corporation, a non-profit, a limited liability company or a partnership (limited, or limited liability). Sole proprietorships or general partnerships require no legal entry formalities except compliance with State and local licensing and taxation requirements.

    For assistance in selecting the best legal structure for your cleaning business, visit business.gov’s Business Incorporation guide. In the end, however, the assistance of a professional accountant or legal counsel may be needed.

    There are several business structures that you could use for your cleaning business. Each one of them differ some important features.

    • Sole Proprietorship: It is the most common type of legal structure and most appropriate for small businesses because it is easy to establish and run. The owner or sole proprietor of the cleaning business has full and total control of the business and is not held accountable to any partner or investors. The money invested in the business is purely the owner’s. The one great disadvantage of a sole proprietorship is that the owner is solely responsible for all the financial responsibilities of the business. If the business operations fail, the personal assets of the business owner may be utilized to pay the financial obligations incurred by the cleaning business. The sole proprietor is also the only one responsible for the employer's share of the employees' taxes which pegged at 15% could mean a tremendous strain on resources.
    • General Partnership: this structure has two or more partners sharing investments, profits and losses generated by the business. The profits or losses from the business will be on the individual tax returns of the respective partners who are responsible for the operation, decision making and financial obligations of the business.
    • Limited Partnership (LP): comprises general partners in charge of running the business and are subject to personal liability and limited partners who put investments in the business but have only their investments exposed to business risks.
    • Limited Liability Partnership (LLP): this is similar to limited partnerships. The only difference is all partners have limited liability. This structure offers both the pass-through taxation of a partnership and the protection from liability of a corporation.
    • Corporation: this is the most common form among bigger companies. Corporations are separate and distinct from their owners. It has juridical personality that is subject to taxation for any profits it will realize and is liable for any financial responsibilities it will sustain. One advantage of this legal structure is that investors do not have personal liability on the business. Their liabilities are limited to the amount they invested. A disadvantage though is that investors have very little or no control at all on the running of the corporation. This is left to professional managers who get paid for doing this job.
    • C Corporations: These are publicly held companies where stock shares are sold to the public who get their share of earnings when the corporation earns money. One clear disadvantage of this business structure is that your income is double taxed. The corporation pays taxes for income realized before they pay dividends to the stock holders. The dividends earned by the stockholders will be taxed too since they must be declared as part of their income. No special allotments of itemized tax exist in Maryland Corporations. Investments poured on the corporation can be taxed unless the incorporators meet the eighty percent control test of Section 351 as provided by the Internal Revenue Code. All shareholders may not deduct losses from their corporate income.
    • S Corporations: This business structure is not subject to double taxation like a C Corporation since this type enjoys special tax status with the IRS. Forming an S corporation allows you to benefit from the limited liability of a corporate shareholder but pay income taxes like you were the sole proprietor of the business or just a partner.

      In a regular or C corporation, the company itself is taxed on profits earned from the business. The owners have to pay individual income tax only on money they get from the corporation as dividends, bonuses or salary.

      In an S corporation on the other hand, all business earnings pass through to the owners, who must report them on their personal tax returns. An S corporation itself doesn’t pay income tax. However, such a corporation which has more than one owner is obligated to file an informational tax return to report each owner's share of the income of the corporation.

    The Maryland Department of Assessments and Taxation accepts documents to create corporations, limited partnerships, limited liability companies and limited liability partnerships. The department also registers business entities which are formed in other states or countries and are doing business in Maryland. Registration of trade names for businesses operating under a title other than the owner's name is also provided.

    All businesses that operate as corporations, limited partnerships, limited liability companies or limited liability partnerships are required to register with the Department.

    For registration of a Business Name, form a legal entity, such as a corporation, LLC, LLP, LP, business trust or foreign corporation, call (410) 767-1340. Entities with questions concerning the sale of their own securities should contact the Maryland Office of the Attorney General (Securities Division) at (410) 576-7045.

    For registration of a general partnership or sole proprietorship, call (410) 767-4991.

  8. Employer Identification Number

    You must have an Employer Identification Number (EIN) if your business has employees. EIN identifies the tax accounts of employers, corporations, partnerships, limited liability companies with more than one owner, estates, trusts and other entities. Under federal rule, you also need an EIN if you have a qualified retirement plan, operate your business as a corporation or partnership, or file employment taxes, or excise taxes. An Employer Identification Number (EIN) is the same as a Federal Tax Identification Number. You may apply for one using various methods such as online, by phone, mail or fax.

    • Apply Online: This is the preferred method. The information you entered in the online application is validated during the session and an EIN is immediately issued. You can access the online application at the Internal Revenue Service website.
    • Apply Toll-Free Telephone Services: You can get your EIN immediately by contacting the Business and Specialty Tax Line. They will get your information, assign your EIN and gives the number to an authorized person.
    • Apply by Fax: You can send by fax the completed Form SS-4 application. If you provide your fax number, they will send your EIN within four business days.
    • Apply by Mail: Processing time for application for EIN through mail is usually four weeks.

  9. Registration for State Taxes

    Businesses that operate in the state of Maryland are required to register for one or more tax-specific identification numbers, licenses or permits, income tax withholding, sales and use tax (seller's permit), and unemployment insurance tax. You can visit the following websites of agencies responsible for business registration and your tax obligations:

    All businesses must fulfill their tax obligations to the federal government and the State of Maryland. To help determine the taxes for which your business will be liable, complete Maryland's Combined Registration Application which can be submitted on line from the Comptroller's web site.

    For additional information on obtaining and completing the Combined Registration Application, contact:

          Taxpayer Registration Assistance Center
          Comptroller of the Treasury
          301 West Preston Street, Rm. 206
          Baltimore, MD 21201
          Telephone: (410) 767-1300

    Other local taxes in Maryland require no additional registration.

    New businesses must contact the Internal Revenue Service (IRS) to register for: an employer identification number; income tax- business and employee withholding; social security; federal unemployment insurance; and other federal taxes.

    The IRS provides business kits for three types of businesses: sole proprietorships, partnerships and corporations. If you need more additional information, contact:

          Internal Revenue Service
          31 Hopkins Plaza
          Baltimore, MD 21201
          Telephone: (410) 962-2590
          Toll-free: (800) 829-1040

  10. Getting an Maryland Business License

    Not all businesses need to obtain a license while some types of businesses do need to have more than one. No generic state business license exists. For local business/occupational license or permits for operating cleaning services in each incorporated city or town, you need to get in touch with local authorities as they may have their own restrictions or requirements for licenses, permits, zoning rules and taxes. These may affect the operation of your business. Local license requirements ensure that registered businesses are safe to the public and given legal protections to which a licensed business is entitled. A business may be inspected or visited and required to fulfill local zoning, building and parking requirements before being issued a license. Each business location, in majority of cases, will require a business license.

    Maryland now has Business License Information System (BLIS), a web-based system that helps new and existing business owners find out which state licenses and permits they need to legally operate in Maryland. By providing most of the necessary information, this online system greatly reduces the time and money that small and mid-sized companies typically spend researching the legal requirements of business licenses.

  11. Operating a Business in Maryland

    There are several things you should do so you could operate your cleaning business legally in Maryland.

    1. Pay Your Taxes: Most businesses established in Maryland are required to pay their business taxes to the Maryland Department of Revenue. You can go to the following websites for guidance on how to file and pay business taxes:

      As an employer you must also pay Unemployment Insurance Tax and Workers' Compensation Insurance.

    2. Keep Your Business and Professional Licenses and Permits in Good Standing: You can visit the Licenses and Permits which has links to services and information for applying and renewing Maryland permits and licenses.
    3. Hire and Manage Employees

      If you are just starting your cleaning business, you can study the Ten Steps to Hiring a New Employee where you can learn how to comply with federal and state laws concerning labor.

      If you will hire independent contractors for your business, it is important that you understand the difference between employees and independent contractors.

      All Maryland business owners and employers should follow federal and state labor laws and equal employment opportunity laws that prohibit discrimination in employing workers.

      Labor Laws

      Equal Employment Opportunity Laws


    4. Report New Hires: As part of Welfare Reform of 1996, Congress enacted a law called the "Personal Responsibility and Work Opportunity Reconciliation Act," (PRWORA). This law created the requirement for all employers in all 50 states to report their new hires and re-hires to a state directory within twenty days of their being hired or rehired. You can go to the Maryland New Hire Reporting page for more information on how to register.
    5. Post Required Notices: State and federal laws require employers to display prominently specific posters in the workplace that gives information to employees regarding their rights and responsibilities of employers. You can get these free posters from state and federal labor agencies.

      The Workplace Posters page for specific federal and state posters will give you the needed information for your business.

    6. Adopt Workplace Safety Standards: Employers must comply with the standards provided by the Occupational Safe and Health Administration (OSHA) which offers free on-site, consulting services. They can help the business owners identify and eliminate hazards in the workplace. You can also visit State of Maryland Department of Labor, Licensing and Regulation for additional information on how to comply with OSHA regulations.
    7. Comply with Environmental Regulations: Depending on the type of your business, you may be required to comply with specific environmental regulations and get environmental permits. This is needed especially by those business that release environmental pollutants or if your business involves storing, treating or disposing of hazardous or solid waste materials. Disregarding this requirement can cost you hefty fines. The Maryland Environmental Permit Requirements and Environmental Compliance Assistance will give you information if your business needs to comply with these requirements.
    8. Insure Your Business: Your investments are protected by insurance by reducing financial risks that are linked to unexpected occurrences like a partner’s death, an employee’s injury, a major lawsuit or uncontrollable and unpredictable natural disasters. It is the state government that determines insurance requirements for local businesses. For more information regarding purchase of commercial insurance and help in finding a licensed agent, go to the Maryland Department of Insurance.
    9. Keep Good Records: As a business owner you may be legally required to keep tax and employment records. You can visit the following websites for resources and tools to help you maintain your tax records and other required documents such as payroll, eligibility to work, etc.

  12. Starting Your Cleaning Business in Maryland

    People put up their own business to make profits - to earn money they could use to buy things that would make their life more comfortable and enriched. You wouldn’t be far off from this. For those who are lucky, their business is based on something they do very well and love to do. But for all intents and purposes, you don’t have to love cleaning houses to start operating cleaning services successfully. In fact, you can begin even without possessing an iota of knowledge about this industry.

    Your target income will depend on the size of the cleaning business you want to set up. You could start as a one person cleaning service with a home office or you could immediately start big and get a commercial office and hire qualified personnel to work as your employees.

    Below are some easy steps to help you start a cleaning service in Maryland:

    1. Determine the kind of cleaning service you will offer. You need to decide if you are going to clean houses or commercial establishments, and what kind of cleaning will you offer in these places, whether you are going to do vacuuming, making beds, dusting, etc.
    2. Pricing your cleaning services. You have to have an idea about the rates you will charge your customers. For this, look at your competitors in the industry. Consult your telephone directory and read the classified ads of your local newspapers to look them up and call them to find out the cleaning services they are offering and the rates they charge for their services. Base your own pricing on the information you will gather.
    3. Calculate your startup costs. Include in your calculations the materials, tools, advertising, transportation, insurance and other expenses you incur. Create a list of all those you use. Find out how much each item cost you and write the amount next to the item being considered. After listing these down, you can start adding up your total costs for the startup.
    4. Name your business. The name you give your cleaning business can sometimes determine if a client will choose you over other providers of the same services. Choose the appropriate name that has not been taken by others and one that will make your cleaning business stand out from the rest of the industry players.
    5. Learn the zoning regulations and other cleaning business regulations of the local area where you are going to set up your business. Find out their cleaning service requirements and cleaning business laws. They may have regulations and restrictions that could affect your business operations. Some zoning regulations for example prohibits home based businesses.
    6. Offer a few free cleaning jobs. They will not be really free as in doing so you get references and leads that could bring in the money. This will also establish your credibility and dependability at the same time. Try these first on your friends, relatives or non-profit groups in your area.
    7. Advertise your business through promotions, word of mouth and other media. Create tie ups with local businesses like a restaurant or a grocery store. Set up a raffle box or any suitable container in these places where potential clients can put a slip of paper with their name and contact numbers. At the specified time, draw the winner who will have free cleaning services from you. This type of promotion helps increase the number of customers for your cleaning business.
    8. Start getting your first paying client.

    This is only the beginning of a profitable cleaning business. To help you manage your business better, try taking a cleaning business course so you can improve your business in terms of expansion, growth, accounting and inventory practices, tax filing, insurance, improved marketing strategies and more.

  13. Conclusion

    Many of workers and families today are stressed and overworked. They put in a 12-hour workday, they come home to feed and put their children to bed. With this pressing need to take care of the family, the last thing they want is to worry about cleaning the house and putting it in order. A lot of parents spend their weekends running errands but they still want to spend quality time with friends and family members. To respond to their families’ demands, many of them look for outside assistance with housekeeping.

    Housekeepers have ceased to be regarded as simple hired help. They have actually reached a well-deserved level of respectability; their services are much-appreciated. Starting a cleaning business is something most people can do because there is a very small start up cost required.

    Starting a cleaning business is not easy but it is certainly rewarding personally and professionally, and not to mention, lucrative. The earnings are great and on top of that you establish your own work hours and choose the people you work with. You will have fun being your own boss. The people on the community where you will set up your cleaning business will not run out of jobs for you and who knows, you might enjoy your work environment more than you ever expected.

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