Websterís dictionary defines an entrepreneur as “A person who organizes and manages a business undertaking, assuming the risk for the sake of the profit.” What does it take to be an entrepreneur? Do you have what it takes? I believe the success of this business relies on integrity and personal responsibility. If you care about your clients and the quality of your work you will most certainly be rewarded with success.
How Important Is A Business Name?
In my experience, a catchy name for a business is a great asset, although not necessary for success. I Can See Clearly Now is a name that people stop and read, think about and remember. My logo, of an eye looking out of a window frame, was eye catching–and FUN!
Choosing A Name You can approach this a couple of ways:
1. A practical approach would be to choose a name that begins with “A” so that you would be one of the first listings in the yellow pages of the phone book. Or use a straight forward name that lets people know exactly what you do, such as “Janeís/Jackís Window Cleaning Service.”
2. A creative approach would be using a play on words or something that is fun. Some examples already in use are “Great Panes,” “We Do Windows,” “Crystal Clear,” “Clear-Vu,” “See the World,” and “Unlimited Vision.” A slogan idea is “Take the pane out of washing windows.” Use your imagination, be creative and get as close to the first listings as you can.
The only way to protect your name in most states is by incorporating or filing a Certificate Registration of Trademark with the office of the Secretary of State. It is necessary to file a Registration for each category of business and each specific business in which you wish to protect your name and logo. The Registration is effective for 10 years from filing and costs around $50 for each one filed.
State Business License
The first step in obtaining a business license is to write to your state or local Department of Licensing, since each area differs in its requirements. In addition to licensing requirements, you will receive information on business structures, business or trade name registration, state, local and federal taxes, employer/employee regulations, and whether or not your business is required to collect sales tax. Obtaining a state business license is usually a simple procedure–fill out some forms and pay a tax. But the fines for operating without a business license can be severe, and are usually retroactive, so even if you get away with it for a while it can eventually prove disastrous.
There are different regulations and tax structures affecting the various business structures. The following are useful definitions:
1. Sole Proprietorship
One person, in business alone, is a sole proprietor. Sole proprietorships are the most common form of business organization. Fewer legal controls, flexibility of management, and reduced taxation make this type of business relatively simple to form and operate.
A partnership may be composed of two or more persons who agree to share the liability and decisions of their business operation. The partners may hold varying degrees of responsibility, liability and notoriety. Terms of the partnership are generally formalized through Articles of Partnership which may be filed at the county clerkís office of the county in which the principal place of business is located. This filing provides protection to each partner by formalizing the contractual agreement.
Basically, a corporation is “an association of individuals united for some common purpose, and permitted by law to use a common name, and to change its members without dissolution of the association.” The corporation is by far the most complex type of business structure. Articles of incorporation must be prepared and filed at the Secretary of Stateís office along with payment of various fees. Corporations may be formed for profit or non-profit purposes.
The State Department of Revenue often mails the necessary tax forms to all registered taxpayers 10 days before taxes are due. Monthly, quarterly, or annual reporting periods are assigned by the State Department of Revenue on the basis of the amount of tax liability. The Internal Revenue Service will also provide you with the forms necessary for filing your Federal Income Tax Return.
The licensing requirement of cities and counties vary from state to state. Once you have decided where your business will be conducted, you should contact the appropriate agencies. To determine if you are required to obtain a local business license, contact the city clerkís office and/or the county auditorís office, depending on the location of your business.
1. Commercial Account vs. Personal Account
It is necessary that you keep two bank accounts, one for your business and the other for your personal needs it makes it much easier to keep records of your business expenses and income.
Make all your income deposits to your business account, and write checks for business expenses from that account so you will have written proof of those expenses. When you need to pay yourself, write a check to your name or to cash as a draw. You can either deposit that check in your personal account or cash it for your own expenses. Don’t write checks to cash for any other reason, as you would have no record of the expense. Check with a bookkeeper or accountant for advice in this area since tax laws often change from year to year.
2. Check Register
For a detailed record of each check issued, I recommend keeping a check register form that offers spaces to list your own expenses. Be sure and balance your check book each month when the statement arrives. Keep your canceled checks for at least three years, which is the statute of limitations for the IRS.
1. Keep It Simple
My first advice, if you have never kept books for a business, is to find the simplest way; second, balance your books every three months instead of waiting until the end of the year; third, hire a bookkeeper to set up a system for you that will be easy to follow; and fourth, purchase or borrow the latest books for general small business information. There is no reason to make bookkeeping difficult and a good system will save you many hours of grief at income tax time.
The system I used for my window cleaning business was very easy:
a. Carry a loose-leaf notebook, using a ruled page for each month.
b. At the end of each day, enter the date, account name, mileage, amount paid and any notes regarding the account.
c. At the end of each month, type the monthís business, totaling the mileage and amount earned.
d. One a separate ledger, keep track of business expenses and total those at the end of each month.
e. At the end of the year, total the monthly amounts for computing taxes.
3. Appointment Book
I kept track of appointments by using a simple datebook with a whole month on a single page and room to write names on each day. I also kept an alphabetical list in my notebook of all my accounts, their address and phone numbers and the amount charged for the job
4. Card File
I maintained a separate card file with a 3″ by 5″ card for each account, filed in alphabetical order. There are three sections: (1) for regular accounts–monthly and weekly–assurance that I donít forget anyone, (2) active accounts, and (3) dormant accounts.
5. Receipt Book
For simplicity of billing, carry a small receipt book (either carbonless or with a reusable carbon).
6. Commercial Billing System
For his commercial accounts that require monthly billing, use a receipt book with a two part receipt and carbon copy. Retain the copy in the book and the original goes to the customer. The original is in two sections; one part to be retained by them, the other to be sent back to you with a check
The system which I used and described above, which took 30 to 45 minutes to complete after I got home at night, could have been so much faster with a data management systemóitís easy to make the entries and merge the new entries alphabetically with existing ones. Today there are numerous software programs available for your bookkeeping needs, and they change and improve too rapidly to make it feasible to mention specific titles here. Check your local software store for the various programs available to you.
1. State Income Tax
Upon registering your business in your state, you will receive state income tax forms to file either monthly, quarterly or annually, depending on the amount of tax liability (i.e. how much you generate in business).
In some states there is a “below minimum” threshold for business and occupation tax. This means that no business and occupation tax is due from monthly reporting taxpayers having gross sales or income (“gross” income means your income before any business deductions) of less than a given amount in a calendar month, quarter or year. This amount varies by state, and is subject to change yearly. Persons whose gross sales or gross income is equal to or greater than these amounts are taxable on gross sales or gross income without any deduction.
2. Federal Income Tax
Filing a tax return is a necessity if your gross income is above the minimum established by the federal government. The government now requires that you pay an estimated quarterly amount of tax based on your tax from the previous year or projected tax for the current year. If at the end of the year you have overpaid what you owe the government, you will receive a refund, and if not, you will have to pay the additional amount owed and possibly a penalty.
I recommend that you hire an accountant to help you sort out the details of your tax needs. I kept my own books, based on guidelines established by my accountant, and at the end of the year I delivered them to her to prepare my tax return. I have no doubt that she saved me a considerable amount of money by knowing the current tax laws.
Be sure and keep accurate records, including receipts, of all your income and expenses. Remember, all your business-related expenses are tax deductible the monthly phone and advertising charge for a business phone, newspaper advertising, monthly bank charge, laundry, all office supplies for the business and all window washing and related equipment. There are also available deductions for using your home as an office, but be sure to check with the IRS for you must meet rather particular criteria. You can depreciate a portion of your car and other major expenses for your business, such as ladders, from your taxes. Mileage is a deductible expense for your vehicle, but to do so itís now mandatory that you keep a daily mileage log for proof. If you damage anyoneís property the cost of replacement is tax deductible. Even the state taxes youíve paid and the accountantís fees can be a deduction for your federal income tax. Keep track of everything.
4. State Sales Tax
Some states donít collect sales tax for certain services such as window cleaning. Be sure to check your local and state laws for regulations concerning sales tax.
5. City and County Taxes
This is another tax that varies from area to area and state to state. Contact your city and county auditorís office for their regulations.
Types Of Coverage
There are several kinds of insurance you should consider when entering the field of window cleaning: health and disability insurance for yourself; liability insurance to protect other people; automobile insurance for your vehicle; and Workerís Compensation Insurance for your employees.
With the high cost of health care in this country, it is wise to have some kind of health insurance. There are lots of options regarding health care, and the overall structure of health care is being altered. Investigate your options.
Workerís Compensation Insurance
If you have employees it is mandatory in most states that you provide them with Workerís Compensation Insurance. Coverage for your employees is mandatory and it helps both you and your employees. You cannot be sued for damages when a work-related injury or illness occurs if you are covered by state workerís compensation insurance. Your employees, if injured, are covered for all approved medical, hospital and related services essential to their treatment and recovery, including wage replacement payments.
You can get liability insurance coverage that will pay for damage that you do to someone else or their property in the course of doing your job. For $300,000 coverage (the minimum) you could expect to pay from $200 to $800 a year with no deductible for property damage or deductible for bodily injury, should you hurt someone else. This is assuming you are a sole proprietorship with no employees, and less than $1,000 invested in equipment. See whatís applicable in your area by talking with an insurance agent or broker.
Disability Income Insurance
This type of coverage pays you an amount of money based on your income if you are injured or disabled. This is particularly important for the self-employed since there will be no money coming in if youíre unable to work. Automobile Insurance
Liability insurance is mandatory in most states so that, in case of an accident in which youíre at fault, the person or property that you injured or damaged would be covered by insurance. The premium for a vehicle that is used for business is normally higher than one for personal use only. Be sure that your insurance agent is aware that youíre using your vehicle in your business so you will be protected.
Commercial Vs. Residential
The types of accounts you seek are dependent on the area in which you live or are working. It also depends on whether you want a steady routine and the reliability of commercial accounts or the variety and flexibility of residential accounts.
Commercial: If you live in a city with lots of businesses, you can arrange with the owner or manager of each store to service his or her windows on a weekly, bi-weekly, or monthly basis. Restaurants, fast food places, bars, and taverns require more attention on the inside because smoke/grease builds a thick film, and they usually acquire more fingerprints as well. Office windows also require routine attention on the inside and are another source of reliable year ëround work.
If you do decide to do only commercial accounts, arrange a system so that you do a whole area at once for efficiency. A friend who works in the city has a route that repeats itself every other week. The positive aspects of commercial accounts are dependability and the fact that the work is not seasonal. The drawbacks for me were the repetition and the using a pole on large windows all day. Another drawback is that there is usually a lot of merchandise in store windows that either has to be moved or maneuvered around when doing the inside. They may also not pay as soon as the work is done, but instead make it part of their monthly bookkeeping, and may want a thirty day billing.
Apartment buildings in the city are a great source of windows, and the cleaning normally only involves the outside. These accounts can be arranged with the owners or managers of the buildings, and are usually steady–done once a month or once every two months. The tenants of the apartments are normally responsible for the inside windows and often will contract with you independently while youíre on the job.
Single family dwellings were my favorite type of account. With residential accounts you deal directly with the homeowner rather than some hard to locate property manager or business owner. You are usually paid as soon as you finish the work, and normally make more money per job. And once you prove yourself and gain the trust of a homeowner they are less likely to drop you in favor of some unknown competitor just for the sake of a few dollars.
How To Charge
You want to be competitive in your price structure and yet earn a decent profit. I suggest determining how much other window cleaners are charging in your area and then setting your prices accordingly. Cost of living varies so much between cities and rural areas, and between various parts of the country, that itís impossible to tell you exactly how much to charge. However, as mentioned in the introduction under “income,” you should be making $35-$45 or more per hour.
You can arrive at a price for a given job by either bidding the entire job, based on how long you estimate it will take and how much you want to make an hour, or by charging by the window. The advantage of charging by the window is that the customer can estimate the charge on the phone with you by counting the windows. You can confirm the cost to them when you arrive on the job, and before you start working.
Charging By The Window
In residential work I normally didnít vary the price by the size of the window because that seemed to even itself out when I did the whole house. The only variation is that I charged more for very large store-front windows or high windows that involved one or more ladder moves to do each window. I charged for each ladder move. For a normal two-unit window with one-half that slides open, I charged as one window. Windows with three units are charged as two and for those small panes I charged by the column. That is, if itís three panes across and four panes down, I would charge as three windows. Those little ones take longer to do than large ones. They are a real “pane.”
Glass sliding doors are charged as two windows and screen doors with a removable pane count as two windows. Storm windows that have to be taken down, washed, and replaced, count as one set of windows, while the permanent ones count as another set. I did a few mobile homes with storm windows. If you live in an area of severe winter weather, you could encounter them often.
I was rarely asked to wash screens, but when I was, I charged for each one, to wash them with a brush and hose them off ($2.50 each by 1996 standards). Often times the customer would do that after I took the screens off.
I charged the same for scraping as for washing. That is, if I was washing new windows and they needed to be entirely scraped, the charge would be double. Be sure to inform the customer that the windows will need a thorough scraping before you begin so they will be prepared for the extra charge. Also itís very important that if you notice the windows are scratched or damaged you inform the customer in advance so that you wonít later be blamed for the damage.
If you decide to charge by the hour, give the customer a total bid for the job–donít quote them an hourly rate! If youíre just beginning, youíll want to charge less per hour, since the job will take you longer. As you become more efficient you can do the same job in less time and your hourly rate will increase, even though the price for the customer is the same. Bidding an entire job enables you to earn a more consistent hourly wage than charging by the window. To establish how much youíre going to charge, decide how much you want to earn an hour. After practicing and becoming proficient it will be easier to determine how long a given job is going to take.
If you under or over bid your first couple of jobs, take the time to make detailed notes on what you did not factor in that caused the miscalculation. Youíll quickly develop an important checklist of things to look for and ask about when giving a bid.
When bidding the whole job, window washers have several questions they ask potential customers over the phone, which allow them to calculate the size of a job without actually visiting the site. How many windows altogether? How many square feet is the house? How tall is the house? How big is the biggest window? Are there louvers? How many windows are above the ground floor? Whatís the address? (i.e. what part of town? Youíll get to know typical house sizes in various parts of town). These questions allow you to give the customer an estimate of the job cost. Youíll need to confirm the price once you arrive and actually see the job.
When youíre first bidding jobs, youíll probably want to actually visit the site. I generally walked around the site and counted the windows, taking into account any ladder work, moving furniture or store displays, determining if the windows are single pane or storm windows (which more than doubles the work) removing and replacing screens or any situations that would cause me to work more slowly.
Be sure and inspect the windows carefully before bidding to determine if they will need to be scraped, which will generally take twice as long to complete the job
Almost 95% of my collections were made on the job when I was finished. That cut down on the hassle and overhead of collecting from my accounts. It made my dayís earning an immediate reality. Most businesses also require a receipt, especially if they paid in cash. I used the same receipt book for that purpose. If you are servicing business accounts that normally do their bookkeeping once or twice a month, I would suggest keeping a record of the work done and deliver a bill to them in person at the end of the month while on your regular route.
Most of my contracts were verbal and I found it unnecessary to make them any more formal than that. However, one window cleaner mentioned that she used a one-page contract which listed the four types of jobs she offered:
- Standard Cleaning–normal cleaning of all windows to remove typical dust/dirt.
- Chemical cleaning–a standard cleaning, plus the use of certain chemicals (listed) to remove hard water deposits and (listed ).
- Paint/sticker cleaning–standard cleaning plus removal of paint and /or stickers.
- Construction cleaning–combination of all the above plus removal of all dirt, debris, etc. from frames/glass.
In the case of large commercial accounts or contracting with builders for clean-up of new construction where there is a lot of money involved, a written contract is in order. If you do want to have something in writing, it should clearly state whatís expected of you both. It should state how often the account is to be serviced and when and how much you are to be paid. In the case of a very large account, arrange to be paid half before you begin or part way through the job and the rest upon completion. If merchandise is to be moved, the contract should state whose responsibility that is going to be. The contract should be signed by both you and your customer, and each of you should retain a copy.