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Episode 150

Understanding Cleaning Business Insurance: Episode 150: Mike Campion LIVE


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Episode 150 – Cleaning Business Insurance and Hiring Employees

Making Money in the Cleaning Business
Episode 150 Rachel Hicks
Today, Mike talks about getting cleaning business insurance with Rachel Hicks owner of Slightly OCD Cleaning,

Rachel wants to hire employees so she can stop cleaning and focus on getting more work. She isn’t sure about 1099 employees vs w-2 employees or what insurance she needs.

Disclaimer: Even though Mike is extremely good looking and a bundle of fun, he isn’t an employment law attorney or insurance salesman. This is just a one business owner to another type of conversation. Check with your attorney a a less fun but potentially more informative perspective…

Now that we have that out of they way, insurance shouldn’t be a big scary thing. There are only a couple types of cleaning business insurance you need and they are simple to explain:

Workers Compensation- This protects your employees (but not always 1099 contractors) if they get hurt on the job. Often required by law
Liability Insurance- This can cover you as a business owner as well as your customers if something gets lost, stolen, folded, spindled or mutilated by you or your people and is an excellent idea for business owners
KEY POINT: 1099 subcontractors are supposed to have their own insurance. Often they don’t. Do NOT hire any contractors that do not have insurance
You might be tempted to say “not my problem”, but that can bite you in the butt. Nothing goes wrong until something goes wrong.

The only other types of cleaning business insurance are typically associated with payroll. Social security, unemployment, etc. These are all of the super-fun (NOT) fees you have the privilege (super sarcastic) of paying when you hire employees.

The best way to handle this is through a payroll service like ADP or even through Quickbooks. Of course you have to pay for these services, but it is much less expensive than the fees and cost of screwing up your payroll withholding!

The key to all of these types of insurance is to work with professionals that

Know their stuff
Know the cleaning business and about cleaning business insurance
Have your best interests at heart!
NOTE: When you hire 1099 contractors, they are responsible for these expenses as long as they are NOT employees as defined by the government (FREE podcast on just that subject HERE)

Now that we have that cleared up, Mike goes on to coach Rachel about how to hire people, when you feel like there isn’t enough money to pay them and make a profit. One of the beautiful things about the cleaning business is the low barrier to entry. Just about anyone can start a cleaning business. The problem is so many owners don’t treat the cleaning bsiness like a real business.

WRITER DOWNER: Treat your business like a hobby and it will pay like a hobby- treat it like a business and it will pay like a business
So many people get into the cleaning business with absolutely zero capital to invest. Technically it is possible to start a cleaning business like that, but not a good idea. Get a job- save a couple thousand dollars and THEN start your cleaning business.

Back to the problem of not being able to afford to hire employees. If you charge properly and have 30 or more hours of cleaning work weekly, you should have plenty of money to pay employees. If you don’t have enough money, you likely don’t have enough accounts or even more likely aren’t charging near enough.

One of the most common mistakes Mike finds with the people he coaches are not charging enough money.

KEY POINT: Do not charge by the hour or to clean toilets. Solve people’s problems and charge by the month
People don’t care about the hours you spend, they only care about the result. Move towards ” I solve problems” not “I clean your house for 2 hours”. If you can’t afford to hire an employee to work for you, don’t have a business you have a job.

Before you can scale, you have to get a profitable business model. Don’t ask “How do I transition out with no cushion?” Instead ask “Why don’t I have any cushion?”.

Of course before the fun ends, Mike invites Rachel to the…

Lightning Round:

Best advice you’ve received either personally or professionally?

God is your best friend, He has your best interest at heart.

What’s the biggest mistake you’ve made in the cleaning business we can all learn from?

Not pricing correctly! Not making this business real ages ago!

Can you share one idea people can use to improve their lives or businesses TODAY?

When you’re lost or need help deciding, pray, trust God, be still and listen for help. That’s another amazing podcast/ blog in the books. As always, the best way for you to get the MOST value out of the Grow My Cleaning Company podcast/ blog is to get involved! Leave a comment or question below about employees, cleaning business insurance or anything else covered in this blog. Mike responds to every comment!
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