It can be overwhelming to start your own business, but it doesn’t have to be! There are a few things that you’ll need to do, but there are a lot of steps that you just don’t need to worry about when starting your cleaning business.
Here are our 6 key steps to starting a cleaning business and starting to earn on your own terms. Anything else can wait!
Step 1: Decide how you’re going to structure your business
The most common way to set up your business as an individual is to operate as a sole trader. A sole trader is an individual who goes into business on their own. It’s the easiest business structure when it comes to tax, so it’s perfect for a cleaner just starting out on their own.
You’ll easily be able to claim expenses relating to your cleaning business at the end of the financial year when you complete your tax return. Sole traders usually just need to complete an individual tax return, so there’s no complicated business tax returns to worry about.
When you’re a sole trader, you’re responsible for paying your own tax, ACC levies and contributing to your Kiwisaver. You can either set money aside each week into a separate account so you have it there come tax time (end of March each year) or you can use an accounting software like HNRY that handles all your tax for you.
Step 2: Choose a trading name
This is the fun part! Choosing a trading name can be an exciting part of setting up your business. You can get creative, or you can simply use your own name. If you’re coming up with a business name that’s not your own name, you can check whether anyone else is already using that name.
Step 3: Get a New Zealand Business Number (Optional)
Getting a New Zealand Business Number (NZBN) is not a requirement to start your business, but it can inspire confidence in your customers to have one. It also makes your business feel a bit more ‘official’. They’re totally free to get and easy to apply for via the website.
If you don’t want to get an NZBN, feel free to skip this step.
Step 4: Work out if you need to register for GST
If you’re going to be earning over $60,000 a year in your business you’ll need to make sure you register for GST too. It can be beneficial to register for GST if your business has a lot of expenses to start with as you’ll be able to claim back the GST on those expenses. If your business doesn’t have many expenses, it’s best to hold off on registering for GST until you reach that $60,000 threshold.
If you’re not sure whether you need to register for GST, Inland Revenue has this handy tool to help you work out whether you need to or not.
Step 5: Set up a separate bank account for your earnings
This doesn’t need to be a business account, but it is a really good idea to keep your transactions separate from your everyday spending. Keeping them separate will make it much easier for you to identify your earnings and expenses at the end of the financial year when you need to file your tax return.
Step 6: Set up your Kept account
The final step to starting your own cleaning business is to register on Kept. When you use Kept for your cleaning business, you don’t need to worry about quoting clients, managing your booking calendar, invoicing clients, chasing payments or marketing your business.
We handle all of that - customers will find you via the Kept marketplace and book and pay with you all through the platform. All you need to worry about is turning up to your cleaning bookings and doing a great job.
You don’t even need a website or logo for your business if you’re listed on Kept, as your profile acts as your website. Of course you can still set these things up if you want to, but if it’s not within your budget you can skip it!
Your earnings will be paid out from your Stripe account which you’ll set up when creating your Kept account. You’ll be able to specify the bank account you set up on the previous step as your payout account. When it comes to accounting for your income, we suggest setting up an accounting software that lets you import your bank transactions via a feed, so you can easily keep track of your earnings and expenses.
Some banks offer some great packages for small businesses starting up, so ask your bank if there’s anything they can offer you. If not, you can simply set up another everyday-type account with a card so you can easily pay for expenses.
Further steps to set you up for success
Prepare your cleaning kit
Having a well-prepped cleaning kit is an important part of your success as a cleaner. In Kept, you can choose to offer cleans with eco-friendly products so that is an important consideration too. You’ll need to make sure you have cloths, cleaning solutions, a good mop and bucket, specialised cleaning products and more.
Consider getting insurance
Even if you’re a sole trader running a cleaning business, you still need to consider having Public Liability Insurance. This covers you if there is accidental damage or injury caused by your business at a client’s home. If you weren’t insured and something happened, you would be held financially and legally responsible.
If you have equipment for your business, it can also be worth insuring this in case something gets damaged and needs to be replaced.
Checklist
1. Get an individual IRD number if you don’t already have one
2. Register for GST if you think you’ll earn more than $60,000 per year
3. Get a New Zealand Business Number (optional)
4. Set up a separate bank account for your earnings and business expenses to go through
5. Create your account on Kept
Are you ready to start your own side hustle? List your cleaning services on Kept and start getting customer bookings today! Kept is totally flexible, so you work the hours you want to work. Simply set up your profile, choose the hours you want to work and your profile will be live on the app.
