How To Start A Cleaning Business in Alabama (AL)

Alabama is the center of the US South, a fast growing region of the country. The state of Alabama offers great advantages for both established businesses and businesses in start-up stage. Alabama’s workforce training system has recently been awarded as one of the best, in not THE best in the United states.

The state’s officials highly encourage business operations and they’ve created a very healthy, business-friendly environment that has attracted many major, world-class business to either establish or expand their presence there.
How to start a cleaning business in Al (Alabama)

Cost of Operating

Alabama’s cost structure of operating a business is one of the most competitive in the United States:

Electric Utility Rates: The average cost for industrial use is 4.15 cents per KW and hour. The United States average is 5.27 cents which brings Alabama to having the 9th lowest electric bills in the country.

Taxes and Incentives: Alabama has one of the most aggressive tax incentive programs in the United States for new and growing, expanding businesses trying to promote a competitive business environment. Tax incentives are administered under the Alabama Constitution of 1901 and recently, under the Code of Alabama (1975).

Cost of living: Below the US average.

Transportation Network

Alabama’s transportation network and infrastructure is highly advanced and is in place to meet the demands of every business, big or small. The state has five interstate highways, part of a 74.000 miles network of paved roads. There are 25 freight railroads to service the state. The port of Molile, Alabama is an international shipping hub and the the state has one of the largest, inland waterway systems (about 1.500 navigable). The state is served by 13 airlines through its six airports.

How to start a Cleaning Business in Alabama

1. Go down to the Alabama Business Portal to find various resources to help you with your research prior to starting a cleaning business in Alabama and planning.

2. Get expert advice and training. The state of Alabama offers free counseling services for business start-ups you can apply for. While it’s not a certainty that there will be specialized cleaning business training, the overall training offered will prove extremely useful in your business start-up. You can get specialized cleaning business training online as well starting from this very website. You may also want to check out this guide (opens in a new window) for advanced information on starting and growing a cleaning business.

3. Location, Location, Location. Selecting the right location to start your cleaning business is vital. Cleaning businesses usually get their first clients in the neighborhood, especially if starting operations as a small, sometimes home-based business. You can visit the Economic Development Partnership of Alabama to get advice from on picking the right location for your cleaning business AND to get zoning compliance information.

4. Getting and Registering a Business Name. Thinking of and registering a name for your cleaning business comes up next. This step is highly important, see why along with suggestions and tips in our cleaning business names post. What you need to pay real attention to is to NOT violate any copyright or trademark laws when selecting a name. The State’s laws do not require you to register a fictitious name. Nevertheless, you may register a trade name with the Secretary of State.

The state of Alabama requires certain businesses to register fictitious names. Corporations, LLCs, LLPs and limited partnerships must register a business name via the required forms to the Alabama Secretary of State. Sole proprietors and general partnerships are not obligated to register. Follow these steps:

  • Go to the Alabama Secretary of State to perform a search and see if the name you came up with is available or not. Then, simply apply for a name reservation.
  • Select the appropriate business entity (panel on your left) to learn about the total fees.
  • Download, print and fill all forms necessary.
  • Pay the filling fees as applied. There are two filling fees that needs to be payed. A) the actual filling fee and b) the judge fee. Both are necessary in order to complete the processing of name registration in Alabama.
  • Then you need to go the local notary. Once there, execute the signed forms with a notary acknowledgement.
  • Mail the forms with the appropriate filling fees to the Business Service Division address found here.

Registering your cleaning business name is extremely important both for those you’re doing business with and yourself as a person and business entity. Keep in mind that non registered business are not eligible to file lawsuits in court.

5. Branding your Cleaning Business Name. After you register a name for your cleaning business, you should aim to create a professional logo. This is highly important for branding your name and services. We suggest acquiring the complete cleaning business pack found here that, among many others, offers a premium logo collection. They’re very easy to edit. You can revise your logo as needed down the road. Next, you’ll want to register the corresponding domain name for your online presence using a service like GoDaddy. Then, you should get a premium website to increase leads and start getting more clients.

6. Get a Business Bank Account. As required by US law, you need to open a new bank account for your business transactions to separate those from your personal transactions.

7. Get Insurance. It’s mandatory to get liability insurance. It’s highly advised that you get bonding insurance as well. Insurance fees are relative, they depend on your own needs and choice of insurance providers. Usually, insurance fees are paid every three or six months.

8. Your Cleaning Business Legal Structure. It’s important that you do a thorough research to decide the legal structure of your business which will determine the legal requirements of your business, taxation, liability and other important aspects of operating a cleaning company in Alabama. You can start by reading our guide on Cleaning Business Legal Structures. To that extend, you may have to consult with an accountant and a law firm to make an informed decision and be done with the paperwork that follows. When it comes down to Alabama specifically, you must register your business if it’s a Corporation, an L.L.C. or a partnership (limited partnership or limited liability partnership). If you choose to start as a Sole Proprietor, you do NOT need to register with the state of Alabama. Another thing to note is that no special allotments or itemized taxes exist in the state of Alabama when it comes to Corporations.

9. Get en EIN (Employer Identification Number). The EIN is used for a business entity identification and works very similarly to the FTIN (Federal Tax Identification Number). You can apply for an EIN either online or by phone. You could also use direct mail or fax. To Apply Online, simply go to the IRS Website.

10. State of Alabama Taxes. Every business operating in Alabama needs to register for a series of tax identification numbers, licenses or permits, seller’s permit, unemployment insurance tax and income tax withholding. You should visit the Alabama’s Department of Revenue in order to get information on your tax related obligations. You may find the relative forms here.

The ADOR (Alabama Department of Revenue) accepts electronic filers who have been accepted in the FEFP (Federal Electronic Filling Program). Every person preparing tax returns must retain the Alabama Form AL8453 and all federal and state forms and schedules for 3 years, counting either from the due date of the return or from the date the return was filed. If the tax return preparer claims credit from taxes paid in a state other than Alabama, the preparer must also retain all the forms from that particular state, he claims tax credit from, for the same period of time (3 years).

As an employer, you’ll also need to pay the Unemployment Insurance Tax and Worker’s Compensation Insurance.

11. Get an Alabama Business License. This may not be required (there is no generic business license in Alabama) but you’re obligated to check with the local authorities of every city or town within Alabama you’re going to operate. This is due to the fact each city or town may have its own regulations and requirements regarding your cleaning business’ available licenses, permits, tax information. There might be special zoning regulations or other restrictions that may greatly affect your operations. Your cleaning business is subject to visitation and inspection by local authorities when it comes to local zoning regulations, building and parking requirements etc. Inspection may be required prior to getting a license.

In any case you should obtain a business license prior to opening your business as required by the State of Alabama. The license obviously comes with a fee, determined by the exact nature of your business. State and County License(s) are issued by the Probate Judge or License Commissioner. You may find addresses and contact information here. You should visit the County Offices located in the city or town your cleaning business will operate. Note that you must be able to provide the authorities with thorough information regarding the nature and volume of your business in order for them to determine the licenses you need issued.

You can either go the the ADOR (Alabama Department of Revenue) to get a full description of state licenses or contact them regarding the requirements of your new cleaning business. You may find the mailing address here (it’s on the top right-hand part of the page).

12. Reporting new Hires. Every business operating in the state of Alabama is obliged to report new hires by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. You need to report both new hires and re-hired personnel to the authorities. Visit the Alabama Department of Industrial Relations for more information.

13. Comply with State and Federal Policies. To legally run your business, you should learn about various laws and policies that apply to businesses in the United States and the State of Alabama in particular. To begin with, explore our Federal and State Laws Compliance Guide as well as the Alabama Employment and Labor Laws. State and federal laws require businesses to display posters in the workplace to give employees information regarding their rights and the responsibilities of their employers. You can visit this page for more information about workplace posters. The State of Alabama Department of Labor will assist you in your effort to comply with workplace safety regulations. Finally, learn bout the Alabama Environmental Permit Requirements to find out if special permits are needed in order to comply your business with environmental regulations.

That was our complete guide on how to start a cleaning business in Alabama.

Make sure you read our Cleaning Business FULL Start-Up Guide in order to further and thoroughly understand the industry, the requirements, the process of getting clients and getting more cleaning contracts and much, much more.

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