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In Australia, the demand for cleaning services continues to grow. Residential and commercial spaces are increasingly turning to professional services to meet their cleaning needs.
So, if you’ve been thinking of opening up your own cleaning company then this would be a good time to get started on that idea.
However, just because there’s a massive demand for something, it doesn’t guarantee your company will be invincible. One of the best ways to protect your cleaning company and set it up for a successful future is by taking care of the legal considerations.
Don’t know where to start? We’ve got you covered. Keep reading to learn more.
How Do I Start A Cleaning Company?
When it comes to starting a cleaning company, there’s a number of matters you will need to take care of. Decisions will need to be made, finances will need to be sorted out and agreements will need to be drawn up – to name a few things.
Even if you’re only planning on starting a small cleaning company, you will still need to plan everything accordingly. The best way to organise all your ideas, research and goals is to put it all in a business plan.
A business plan can be something you keep for your eyes only. It can act as a blueprint for your company, keeping you on track when you are caught in the whirlwind of starting your cleaning company.
A few things you may want to include in your business plan are:
- Market research
- Company goals
- Specific services you will be offering
- The locations your cleaning company will operate in
- Budget
- Advertising/marketing
- Legal considerations
Remember, your business plan doesn’t need to be anything fancy or formal – it just needs to make sense to you and anyone else that may look at it.
Setting Up A Cleaning Company: Legal Steps
Now that you’ve properly planned out your cleaning company, you’re officially ready to set it up. When it comes to setting up any kind of company, there’s three main elements that need to be fulfilled: Registration, IP protection and legal agreements.
Let’s discuss them in more detail below.
Register Your Company
Before you start your cleaning company, you will need to make sure it’s legally registered with the Australian Securities and Investments Commission (ASIC). Every single company in Australia needs to be registered with ASIC, regardless of size and industry.
All companies also need to follow the rules and regulations set out by ASIC, such as changing company details, annual fees and audits – it’s important to be aware of your duties under ASIC as a company owner.
Talking to a legal expert can help you better understand the legal obligations that come with running a company. Moreover, company registration can be a bit complex, having a legal expert help you out can make this process much easier. To register your company, you’re required to figure out matters such as what kind of company you will be registering, the company directors and shareholders as well as how the company will be governed.
Obviously, all these decisions will form the foundation for your company, having a huge influence on its future direction and success. Getting a legal expert to assist you during this process makes the difference between your cleaning company having strong or shaky foundations.
Protect Your Intellectual Property
Once your cleaning company is registered, the next step is to secure its legal protections. Intellectual property (IP) is one of the most important parts of your company to legally secure.
Your cleaning company’s intellectual property could be anything – from a unique business name, logo, catch phrases or internal company materials – making sure your IP is secured can prevent others from stealing or copying it (and even if someone does try to steal it, you’ll be able to enforce your rights if you’ve managed to legally protect it).
The legal protection you seek for your IP will depend on the IP itself. For things like a logo, catchphrase or a name, you will need to go the route of registering a trade mark. First, you’ll need to make sure the trade mark isn’t already taken, then, you’ll have to fill out an application form with IP Australia. After that, the trademark will go through a process over a course of several months before it can officially be registered. It’s important to start this process as early on as possible and have a legal expert guide you through it – IP is a complex area of law but once you’ve protected your IP, you won’t have anything to worry about.
For other forms of IP, you’ll need to utilise legal instruments such as confidentiality clauses, non compete agreements or non-disclosure agreements to secure it. Talking to a legal expert and allowing them to draft the relevant materials can ensure you have legal protection that’s catered especially to your cleaning company.
Get Professional Contracts Drafted
Speaking of contracts, IP protection is not the only time you’ll be required to have professionally drafted contracts in place. Securing professionally executed legal agreements is the next phase in setting up your cleaning company.
Contracts are important – they limit your liabilities, protect your revenue streams, distinguish the responsibilities and rights of each party as well as create a method for dispute resolution. When you have a cleaning company, all of these matters are of significant importance. Getting the right legal agreements and ensuring they’ve been drafted specially for your cleaning company is the best way to ensure you’re giving your cleaning company the best start possible.
A few contracts you may want to consider getting include:
- Cleaner Services Agreement
- Dry Hire Agreement
- Employment Contracts
- Website Terms and Conditions
- Privacy policy
As you might imagine, there’s legal agreements for different scenarios/aspects of the business. For instance, you’ll need a legal agreement to be signed when welcoming a new client. However, you will also need a different set of legal agreements for your cleaning company’s website.
Talking to a legal expert can help you decide what legal agreements are needed for your company – be sure to have this conversation as some legal documents (such as a privacy policy) might be legally required.
Are There Any More Legal Considerations For Opening A Cleaning Company?
When thinking about the legal factors of starting your own cleaning company, it’s important not just to consider legal protection but also, legal compliance.
As a cleaning company, there will be a number of rules and regulations you will need to follow. As such, it’s important to make sure your cleaning company is keeping up with these standards. Failing to comply with the relevant rules and regulations could lead to fines, legal penalties and a bad reputation for your cleaning company.
A few regulations you will need to think about as a cleaning company:
- Australian Consumer Law (ACL): The ACL sets the standards for consumer interactions with businesses. Ensure your cleaning company’s policies and practices are in line with ACL requirements such as false advertising, refunds, quality of services, deceptive conduct and pricing.
- Employment Laws: If your cleaning company is going to be hiring employees or contractors, then you’ll need to make sure you’re treating them according to national minimum standards. This means, fair pay, breaks, leave, safety measures, the right equipment and much more!
- Data and Privacy Laws: Naturally, you’ll be collecting information off clients when running a cleaning company. As such, it’s your legal duty to ensure clients are aware their information is being collected and that information is being kept safe. Legal instruments such as a Data Breach Response Plan are useful when keeping up with your privacy obligations, chat with our legal experts to find out more.
Can I Purchase A Cleaning Company Franchise?
Yes, instead of starting a cleaning company from scratch you can always opt to buy into an already established franchise. It’s important to remember though, franchising is a pretty regulated area.
Every franchisor and franchisee needs to follow the Franchising Code of Conduct – you’ll need to make sure your own conduct and that of the franchisor is adhering to the code. More so, there’s a fair bit of paperwork and agreements that need to be dealt with before you can run your franchise company. To ensure you’re being treated well, it’s a good idea to chat with a legal expert in franchising so they can give you the right kind of guidance.
Next Steps
A cleaning company can be a stable and profitable company to invest your time and resources into. However, if you want to give your cleaning company the best chance of success, then it’s imperative to take care of the legal considerations first. To summarise what we’ve discussed:
- The demand for cleaning services in Australia is growing, making a cleaning company a potentially sound business venture
- Developing a business plan that includes market research, company goals, services offered, operating locations, budget and advertising strategies is high recommended
- Register your company with the Australian Securities and Investments Commission (ASIC) to ensure legal compliance and understand your obligations as a business owner
- Protect your intellectual property (IP), such as business names and logos, through trademark registration and legal instruments like confidentiality clauses
- Ensure all necessary contracts, such as cleaner services agreements and employment contracts, are professionally drafted to safeguard your business
- Adhere to legal standards and regulations, including the Australian Consumer Law and employment laws, to avoid fines and maintain a good reputation
- Consider buying into a franchise as an alternative, understanding the requirements and regulations under the Franchising Code of Conduct
If you would like a consultation on how to open up a cleaning company, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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