Credit Lines for Cleaning Companies – Do you need a loan to get started? How do you finance a cleaning business if you are just starting out? And should you have a company credit card for cleaning supplies?
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Hey there, I’m Angela Brown, and this is Ask a House Cleaner. This is a show where you get to ask a house cleaning question, and I get to help you find an answer. You can find this and 400 other answered questions in this series on our YouTube channel.
Credit Lines for Cleaning Companies
Credit lines for cleaning companies. Do you need a credit line in order to build a cleaning business? As we start the new year, there are a whole bunch of house cleaners and they want to know. Should they run out and get a business loan so that they can build and grow a cleaning company?
My answer to you is no, not yet. The reason being is credit means you have to pay it back. And so right now, I don’t want you to have something else you have to pay back until we have money coming in that will pay off those bills.
Starting a Company Means New Bills
So starting a cleaning company, you’re already going to have some new bills, but I want you to keep it small. And I say small because when you plant a tree, you don’t go out and plant a 100-foot tree, right?
That would be an enormous undertaking, but the roots would probably not survive even if you did that, okay? So you plant a tiny seed and then you water it and you fertilize it and it grows and you keep watering it and you nurture it and it grows bigger. And then the sun and the rain and all of the elements that challenge the lifestyle of that tree, turn it into what it is.
It ends up weathering the storms and it grows bark and it gets a little bit stronger and it grows a trunk and it becomes a tree.
Starting a Business With a Loan Might Not Survive
If for any reason you are just to start a business with a ginormous loan, that’s like planting the great big monster tree that the roots would probably not survive, okay? So don’t take out a big business loan yet.
In the cleaning business, I’m going to write this down. This is not commercial cleaning where you clean office buildings. That’s a different YouTube show. This is house cleaning. For house cleaning, we need a cleaning caddy and a uniform, right?
That’s it. That’s pretty much what we’re going to do to clean. It’s us, ourselves. We are what’s going in to clean. And so you don’t need a business loan for that.
You Have to Water Your Business’ Seed First
Now there are a lot of people that say, “Well, I need a company car. I need to wrap my car. I need advertising, I need SEO.” All right, you do need all those things, but not right now, okay? You’re still a little seed that we’re going to plant in the ground.
So right now the seed doesn’t need as much nurturing and as much fertilizer as a ginormous tree. It just needs a little bit because it’s small. So right now we’re going to keep the expenses really small.
Now, what I want us to do getting out is I do want you to get a company credit card in your company name. Here’s the rule with a credit card.
Buying Supplies Builds Your Company Credit
You buy all of your cleaning supplies with the company credit card, okay? That’s going to start building company credit for you, but here’s the rule to the credit card. Credit means you have to pay it back.
So, you’re only going to buy what you can pay off at the end of the month. So before the bill is due, you’re going to pay off every penny that’s on the credit card every single month. Every single month, no matter what, no matter if it’s a personal card or a business card, you’re going to pay it off at the end of every single month.
Your Business Credit Helps Banks Trust You
What that shows the bank is that you have a credit line or that you have access to credit, but that you’re spending it for business only, and that you’re paying it off at the end of every month. And so what that shows them is like, “Well, hey, maybe we can trust this business. We should give them a little bit bigger credit line.”
And the credit line will grow over time, okay? So the day that you go to buy six company cars, you will have a bigger line of credit or you’ll have established credit. And the established credit allows you to walk into a bank and say, “I would like a business loan in order to grow my business.”
You Don’t Need Expensive Things Starting Out in Business
Now, if you’re growing your business, it’s because you’re buying really expensive equipment or you’re buying multiple cars or things like that, okay? Starting out, we don’t need that. And so starting out, I want us to keep all the money that we earn. I want us to just play it close to home, and I don’t want us to spend any money we don’t have to spend even in our personal lives.
So if you have an old phone and the new phone comes out, keep the old phone. Don’t upgrade to the new phone because it’s new, right? If the old one works, hang on to it for a little bit longer.
And always ask yourself, can I hang on to this for a little bit longer? Because if you’re not spending the money, you have the money either to reinvest in your business. And also there are new expenses that you’re going to have that you don’t have right now, okay?
I’m a Huge Fan of Buying Software
So for me, I’m a huge fan of buying software and apps. And the reason being, as I myself, can do a certain number of things. I can do scheduling and invoicing and all that stuff just by sitting down with a pen and paper or typing it up or whatever.
But there are pieces of software like Housecall Pro that will do that for you. And it creates templates so that every single time you go back to a customer, you have a certain set of templates that you are giving to that client that says here’s the checklist for the day.
It says here’s the job that we did today. Even if you hire somebody, that goes to the cleaning employee.
Use Housecall Pro for Invoice Templates
Then there’s that invoice. It’s already a template. It already exists. It’s already got the customer’s name on it. So all that stuff already exists. I just said Housecall Pro. Check it out housecallpro.com/angela. They do have a deal for me and my friends. They will give you a discount. Also, check for different industry providers who have discounts. Now I know over at Savvy Cleaner, which is a learning library that I run for house cleaners. At the top, there’s a resource section.
And if you are new to the business and you have not joined a program, you can still access that resource section. We have provided a lot of stuff for you for free because I don’t want you to spend the money as you get started.
My Book is Free to Download for Business Owners
I wrote a book called How to Start Your Own House Cleaning Company. And it is 100% free on Amazon. You download it and you read it on any device with the free Kindle App.
If you buy the hard copy, you do have to pay for the hard copy. But you can download the ebook for free, okay? And on this YouTube show, this is also a podcast that is in 90 different podcast apps. Over 1,000 shows that answer your cleaning questions for free.
So I don’t even want you to come to the learning library until you have money coming in, until you’re at a certain level of your business, right?
A Lot of House Cleaners Go All In Right Away
I want you to get started for free. Here’s the reason why. There are a lot of house cleaners that think they want into the house cleaning business, and they will get in and they just go all in. There’s one guy I know that went out, and the first thing he did, is he spent $3,000 and he wrapped his company car. It had a great, big flashy logo, name. It looked amazing.
He went out and he bought door hangers and flyers and full-color printing and high gloss printing. And his marketing materials look amazing. But he didn’t have any customers to help pay for those expenses to pay back.
So yes, he did get loans. He did invest. He went all in. He bought a couple of new cars. He bought a bunch of equipment. He got involved in the business and it was all flash and no work.
Missing the Basics Leads to No Work
He had no work and then no work, and no work, and no work, because he missed some of the basics. It’s like planting that great big tree. The root system started to waffle, and then the roots started to die and shrivel up. And it’s like, wow we can’t support this great big, massive thing that’s there because we haven’t established ourselves yet.
And then he went out of business and he went bankrupt. And I don’t want that to happen to you. I’ve seen it all the time with well-intending business owners.
You Don’t Need a Credit Line Right Away
So do you need a credit line to get in the business? No, you don’t. No, not yet. Not yet. The day will come when you expand, but you will have money in the bank.
You will have a business credit because you will have built credit over time. You will have tax records where you can show every penny that’s come in and every penny that’s gone out.
Track Every Penny in and Out of Your Business
And if you’re not tracking that right now, I want you to track every penny. I want you to know at the end of the year, how many Swiffer Dusters you bought and how much down to the penny you spent on them during this year. I want to know down to the penny, how much did you spend on glass cleaner.
It’s important to know because how will you budget in the next year, going forward, knowing how many customers you have to have based on the expenses that you have? So you have to know what your expenses are. You have to know what money is coming in.
Then because we pay taxes and we’re good upstanding citizens, you’re going to take about 30% of everything you earn. And you’re going to set it aside for taxes because we pay our taxes. And when you go to buy a house, when you go to buy company cars, they’re going to say, “Let me see your taxes records.” They want to know are a real business? Did you earn money? Did you pay your taxes? And how does your financial history look?
You Have to Track Every Expense to Survive
If you are just accepting cash and you’re not reporting your income and you’re not keeping track of your income, and you’re just buying a bottle of supply here. Oops, I ran out and you go buy another bottle and you’re not tracking it, you’re never going to survive in business.
And I hate to say that. I hate to be ugly, but your business will just fall apart because you don’t have the basics of accounting in place. So I really want you to just stop for a second, spend as little money as you can get started. And we will help you grow from a little seed to a great, big, massive Oak.
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