Starting A Janitorial Business
Empire Capitol at April 11th, 2013
Starting a janitorial business in Ontario requires a few different things that are extremely important in order to operate a successful janitorial business. This article will explain exactly what is required to start a janitorial business, and how to go about doing these things.
1st step is to decide on whether you want to operate your janitorial business under a sole proprietorship, partnership, or corporation. There are advantages and disadvantages for all three of these. Operating under a sole proprietorship is the easiest to open, and cost about $1,000 less. It costs around $70 dollars and is most commonly known as a master business license.
You can register online, or visit your local business registration office. Opening a partnership requires 2 authorized owners. Both owners share all profits, but are both liable for all the risks. Another disadvantage of owning a sole proprietorship or partnership is that if someone sues your janitorial business, you can be held liable personally. So in other words, if someone sues your business, and the business does not have any assets, your personal assets may be seized to compensate for the lawsuit.
The only way to protect your-self from this is to open a corporation. It costs between $1,000 – $2,000. You will also need to decide if you will be operating in your province only, or operating nationally. You can open a corporation regionally, or nationally. You must decide which is appropriate for your cleaning business
. The advantages of opening a corporation are that you protect all personal assets from potential lawsuits.
Because a corporation is a separate entity, all owners, directors, and executives are protected from potentials actions against the company. Obviously the disadvantage is the cost involved in opening a corporation. But if you’re serious about doing business, this is what you should really consider.
Once you have opened your janitorial business, you now will need liability insurance to protect your company in case of accidents, or theft at your client’s properties. The most common limits of liability insurance are 2 million for each occurrence, and $5,000 bond coverage. These limits can be increased at any time, and you should have coverage according to the amount of properties, or employees you have. Call a few of your local insurance brokers to get a few quotes on prices. For new insurance policies the prices ranges between $120 – $200 per month depending on where you obtain your insurance.
This is a very crucial step in your business so do not overlook this. This can be the difference in operating a long term successful business, or being shut down in the very near future. Most new clients will request prove of insurance before they sign any contracts with your company.
The next step is to obtain insurance from your local Workplace Safety & Insurance Board also known as WSIB. You will need this insurance coverage if you’re planning on hiring people to service your accounts. It is against the law in Ontario to employ workers without WSIB coverage for employees. You will need to pay insurance premiums on your employee’s behalf. This will protect you but more importantly protect your employees in case they get injured while on the job. If you decide to sub-contract your accounts to other cleaning sub-contractors, you will need to make sure they carry insurance for their people.
You should keep copies of all this for future records. You will also need to make sure that by sub-contracting your accounts, you do not breach any part of the contracts with your clients by sub-contracting. Some clients will request a provision be put in the contract that stipulates you can under no circumstances sub-contract the service. Once you have completed this step, you are ready to move on to the next step.
Once you have completed these steps you are now ready to start advertising your janitorial business. For more information on starting a janitorial business, check out our best selling cleaning business package.