I’m convinced that a remote service business can be done by anyone with the following
a couple thousand dollars
an internet connection
an ambitious attitude
Why?
Because the method is simple in terms of getting the software stack, the leads, and the contractors ready to go.
Caveat: the setup time takes a bit longer if you don’t know what you are doing, if it’s your first time, or if you don’t have the time to tackle tasks every day.
Over the next few newsletters I’m going to talk about individual use cases that you can use to start your own business
Before that, I want to go over the basic steps of how I am starting and building my cleaning business.
This will be a long post, so I’m breaking it up in a few different phases
Phase 1 - Setting up the business (LLC, licenses, agreements, insurance)
Phase 2 - Tech Stack ( managing contractors, payments, booking)
Phase 3 - Scaling Operations (hiring employees or VAs, selling the business)
Phase 1: Setting up the business
Choose a Market
This should be a market that has little to no competition or the competition is not providing a solid online presence.
Take home cleaning for example. I want to look for areas that are
suburban
single family homes or condos/townhomes
not many cleaning companies in the area when I Google search
I can do this for any service business, and because I’m remote I have the luxury of choosing exactly what area you want to start.
For my purposes, I chose an area close to me with plans to expand to the surrounding areas when I grow. It’s easier to focus and provide massive value to a single area rather than try to be a small fish in a big pond.
Create an LLC - Do This First!
Now that you have a market, the fun part happens: getting yourself in the tax system!
Firs thing is to decide on a name. I picked a name and ended up having to change it slightly to get a domain name.
Before getting an employed ID number (EIN) from the IRS, make sure you do the above first! It’s a big pain in the butt to have a great name only to see that the domain costs $1,000+ to buy off a domain squatter!
Federal EIN
From there go ahead and get an EIN from the IRS. It’s dead simple and the site walks you through it. If you plan on going with a partner it might be more complicated but if you’re a single member LLC like I am it’s pretty simple.
Local Tax ID
The easy parts have been done, now comes doing the local business part of the process.
To create an LLC I had to make articles of organization and an operating agreement.
Now, I’m not a lawyer, so this would take some time (even for a lawyer) to do right.
But I want to ship quickly so I used BetterLegal by Chad Sakonchick to get this done in about 3 days for around $500. It’s a super simple service that gave me both the organization and operating documents as well as templates for meeting minutes, amendments, etc. Can’t recommend it enough and Chad is a great guy!
Business Licenses and Taxes
One thing I didn’t know about when creating a service business was that you may need a business license and sales tax ID depending on the area and services you plan to provide
For me, home cleaning was the only service I was providing. However, if I ended up shampooing carpets, THEN I would need to charge and pay a sales tax!
Insurance
I made it easy on myself and chose NEXT - business insurance to help me out, it’s a cheap and easy option (go for around $1/$2M coverage for most service businesses)
Create/Redline Contractor agreement
If you haven’t already, get with a local lawyer to make sure you are in compliance with labor laws and know how to make sure that contractors don’t claim they are an employee. The cost is around $300-400/hr but well worth it.
I’m still in the process at this stage and wish I had started on this earlier as I have potential contractors but can’t start giving them work until they sign the agreement.
I’m going to stop it here as this phase takes a couple weeks in order to get everything squared away. I underestimated the time it took to find a lawyer that had my best interest and knew what I wanted.
A rule of thumb when it comes to lawyers (and many service providers): Always get a second (and third if possible) opinion and price before you commit. It helps make a better decision.
That’s a wrap!
I’ll be working on Phase 2 of this over the coming days. Let me know if this was helpful!
If you know someone who wants to start a business but doesn’t know how to begin please share this with them!
And if you have any questions leave them in a comment below or email them to me 🤘🏼
GJ Sequeira