So I get obsessive. This week I started looking into starting a window washing business. I worked at Fish a while back, 2010? 2011? And am fondly remembering my time there, outside on a route.
As you can see I picked a name, Stan Shine since I am in Stanislaus County California and there’s a college in my town called Stan State.
Next thing I think is business license? Or should I do an LLC? Or… Get insurance. I guess my question is, can I get away with a business license and insurance if I’m a “bucket Bob” but legit and grow from there?
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I started my own company exactly 2 years ago. I, like you ,started working for a company and gained my experience, then the company I worked for filed for bankruptcy and I had to figure out what to do. I tried to learn from the mistakes made by my previous boss and what to do right instead.
I would highly suggest becoming an LLC, if for nothing else, for your protection against any litigation. If you are a sole proprietorship, you and your personal assets can be used to make payment on any litigation judgement. If you are an LLC, only those assets listed with the company under the LLC can be used. Your personal funds and assets like your house and vehicle are safe. Even if you use your personal vehicle for work and take deductions for mileage on your taxes, your vehicle is still your’s and not an asset of the LLC, so it is not able to be seized in a judgement against you. Additionally, if you have to file bankruptcy for the business, your personal assets are not at risk for the bankruptcy trustee to seize in order to pay your business’s debts.
Here’s what I would do:
1.) Register your name with the IRS to get a EIN (Employer Identification Number) which is what you will then file your taxes under instead of your personal Social Security Number. This number will also go on you LLC registration and your Business Bank documents.
2.) Fill out your LLC documents, there are a bunch of free examples online to use a template for filling out your company specific info. Some banks will require a copy of your LLC documents to start a business account.
3.) Register your LLC with the State of California. There may be a State Income Tax registration as well. I am in Florida and we don’t have state income tax, but there should be info on California’s business registration website on what you have to do to be compliant with State Taxed. This may be part of your Business License registration.
4.) Register your Company Name under the State’s Fictitious Name Register. This will keep another business from taking your company name and then suing you for a cease and desist order. If you don’t protect your company name, you could be forced to change it via a lawsuit judgement and then you have to pay again for all of your business related items like bank accounts, business cards, advertisement materials, uniforms, vehicle signage, etc.
5.) Once you get approval from the State that your LLC and name have been approved and registered, you can then get your business bank account started.
6.) Finally, after you get your business account started, you can then put funds in there to then pay for your business purchases including commercial liability insurance. This will help keep your tax documents separate and organized between your business and personal bank accounts and expenses. Save your receipts for everything including your registration fees from starting up the business for your tax deductions at the end of the year.
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Awesome! Thanks for taking the time to provide a step by step guide! Would you suggest using am online tool like legal zoom or could I navigate this on my own?
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First thing, Insurance.
California might be tighter on this, but in TN you can earn up to $3000 a year without a business license, but if you happen to mess anything up, you’ll wish you had the insurance. Of course you will need to get licensed and all that, but get the insurance and start rolling with the business while you work on the other things.
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I didn’t use any software or other document preparation services. Florida actually put everything on their business registration website sunbiz.org. If you go on llcbizfile.sos.ca.gov there is a step by step process where you fill out your information and it will help you essentially fill out the articles of organization to meet the requirements for the state of California, or so it appears.
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In my personal opinion you should NOT incorporate (llc inc, etc) until you are ready to step back from the business and run it hand-off. The “insulation” you will hear that it provides you does not really help when it’s your hands on the tools. The insulation it provides does not protect you against gross negligence, either. So if the thing that has gone wrong is your fault, you’re essentially screwed one way or another.
I would advocate the sole-proprietorship route. Invest in quality liability insurance for your scope of work and invest in a good terms of service contract written by an actual lawyer. This will protect you against most liability related issues such as property damage or the occasional dispute. If you’re the one on the tools, and you’re taking your time, and you’re focused on delivering quality work, you will likely not run into any issues. There are always those wildcards, though, and you have to be prepared. Especially in the states where crazies are everywhere.
Start small and be proud to be small. Find the customers who value having you as the person who does the work. As a small business owner you are going to find the thing you are often selling to your customer is really you, because you are the business. You are the business, the business is you - that is essentially the definition of a sole proprietorship.
Taxes are also a great deal less expensive and you don’t need to worry about paying yourself a wage. As an incorporation you will need to put yourself on a payroll system and pay yourself and remit taxes both for your own income and for the company income. As a sole prop your money is the business money, and it is taxed differently. But as I said on the first line, having your taxes done as an inc is maybe $1500 in my case, or maybe $400 as a SP. Obviously those prices may vary based on many different factors.
This might work a bit different where you are but I assume the process is likely very much the same.
- pick a name, conduct registered name search (reserves the name if it’s available)
- register your inc or sp using your approved name search
- get insurance
- obtain a business licence from the city/district(s) you intend to operate within
- get yourself a website (weebly is pretty fool proof imho - it’s how I made mine, https://www.mossaway.ca)
Stay small until it’s time to go big. If you’re making over 150,000/yr gross revenue it might be time to incorporate, but that’s entirely for you to decide. Whatever path you pick, good luck and have fun on the adventure.
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He’ll need to pick a path on inc vs sp first. The business will need to be registered in order for him to take out insurance on it.
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Yes SP would be a better path to start with for me. After further research, the cost and benefits of an llc wouldn’t be worth it. An SP and insurance will get me started on small scale self owned business. However it looks like the window business is in hold as I have two job offers currently. Thanks everyone!
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IMHO starting into window cleaning should be a part time, weekend venture anyways. Having a job to rely on while hustling on weekends is an excellent way to start into window cleaning. If it’s something you’re interested in, and you want to take control of your own income stability, I’d definitely recommend looking at starting out while working another job. 
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Dont forget to read income tax shattering the myth!
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