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Pressure washing utilises high pressure water sprays to clean surfaces that would otherwise be difficult to clean. Most people don’t have the right kind of equipment laying around their homes to do this, so they opt to hire someone to do it for them.
This service is usually referred to as a pressure washing business.
Currently, the commercial cleaning market is worth approximately $14 billion in Australia. If you’re thinking of starting a pressure washing business, then you’ll definitely be entering a market that’s continuing to grow in demand.
Before you turn on that hose though, there are a couple of legal aspects to starting your pressure washing business we should talk through.
How To Start A Pressure Washing Business
The initial step to starting a pressure washing business is going through the process of planning and setting up your business.
Don’t rush through this process or skip any steps as this will lay down the foundations for your business.
We recommended making a plan. Think about how you want your business to be run, what your future goals are and how you’ll gather resources to make it all work – then write it all down and make sure it’s in the same place.
This will be known as your business plan. It’s useful to create one as it can help you think through things, remember them and keep your business on track in the future.
Now that we have the initial blueprint of your business sorted, let’s think about your next steps.
Choose A Business Structure
One of the first major decisions you will make as the owner of a pressure washing business is determining the structure of your business.
The most common types of business structures are:
- Sole trader – one person own the business
- Partnership – two or more people are the owners of the business
- Company – the business is a separate legal entity with limited liability
- Trust – the company is held by a trustee or multiple trustees
Determining the structure of your business requires thinking about a lot of different factors. You will need to assess potential liabilities, the future goals you have for your business, the amount of resources you have available to you and what will be practically achievable in the present day.
Each business structure has their own pros and cons. A sole trader, for example, is a relatively simple business structure to set up and it’s also cost effective. However, you will be personally liable for the business, putting you and potentially your personal finances at risk if something goes wrong.
A company, on the other hand, is a little more complex to set up. However, as the company is a legal entity on its own, your liability will likely be limited.
When it comes to choosing the right structure for your business, there is no distinct right or wrong answer – it’s simply a matter of assessing which path will be best for your business.
If you need help, reach out to one of our legal experts to talk through your options.
Register Your Pressure Washing Business
Now that you have decided on the business structure, you can begin to register your business.
All businesses can be registered online through the Business Registration Service.
When undergoing this process, you will need to provide some details about your business and pay a fee, so make sure you have everything ready to go before you get started.
The business registration service also allows you to apply for any relevant taxes while registering your business. It’s useful to know the tax types that will concern your pressure washing business so you can get this done early on.
Although this step can also be done at a later time, don’t stress if you’re not there yet!
Once you submit your business registration application, you will receive an email letting you know if your business has been successfully registered. In this email, you will also get a nine digit number. This is your Australian Business Number (ABN).
Your ABN is a unique identification number that will be necessary from time to time – make sure to keep note of it.
If you’ve decided to go ahead and register a company, then you’ll need to do a separate, additional application with the Australian Securities and Investments Commission (ASIC). As a company structure has more elements and legal requirements, the application process is more detailed – don’t hesitate to reach out to a legal professional if you need help with this!
Successfully registering your company will also result in getting another pin. This time, it’s an Australian Company Number (ACN). Similarly to your ABN, your ACN is used to identify your company from other ones and is often required when interacting with government agencies.
Get The Right Legal Documents
With a plan for your business and the registrations sorted, you will need to think about protecting your business with the right kind of legal documentation.
We’ve listed some key types of legal documents that are useful below.
Employment Contracts
Hiring employees is a great way to delegate tasks and have help in running the business. Employees form part of your teams and for a business to run effectively, it’s important for all members of the team to be on the same page.
Getting your employees to sign an Employment Contract when they first start with you is an important step in making sure everybody is aware of what their role is and what responsibilities they are expected to undertake.
As an employer, the Employment Contract is also good for establishing pay rates, leave and any other entitlements so your employees can feel secure in their position.
Franchise Agreement
In time, you might find that your business is doing well and it might continue to have the same success in a different region. When this happens, businesses like to franchise their establishment. Essentially, a copy of your business will be established in another place and it will be run by a franchisee.
As you won’t physically be at the location of the franchise, you will be dependent on the franchisee to keep business operations running well. A Franchise Agreement between you and the franchisee of your business can set clear expectations for both parties on their respective duties and obligations.
Furthermore, both the franchisor and franchisee have obligations under the Franchising Code of Conduct, so it’s worth chatting to an expert franchise lawyer who can advise you on the best steps moving forward and how you can remain compliant.
Privacy Policy
Potential customers often use the internet to look for services they require. Bookings and payments are often made online. If your business is going to be operating online and collecting personal data from users, then you are legally required to have a strong Privacy Policy in place.
According to the Privacy Act 1988 and the Australian Privacy Principles (APP), any business that collects the personal information of their customers must have a Privacy Policy on their website.
A Privacy Policy lets consumers know their information is being collected and what that information is getting used for. It essentially allows the business to remain transparent with users around how their data is being used, especially in light of major data breaches which resulted in lesser confidence in businesses generally.
In addition to a Privacy Policy, it’s worth building a strong cyber security system.
Get A Lease Agreement For Your Business Premises
If you plan on renting a physical space for your place of business, then you will need the right legal documentation for this as well.
A Commercial Lease Agreement is the contract between you and your landlord for the use of your premises. Without a lease agreement, it is very difficult to assert your rights as a rent paying tenant.
Generally, a lease agreement should set out how much rent is to be paid, what kind of business you can conduct on the premises, terms around repairs and maintenance and how long the lease will go on for.
Therefore, whatever agreement you and your landlord come up with, be sure to have it in writing and signed by both parties.
A legal professional can help make sure the terms of the contract with your landlord do not disadvantage you in any way. Commercial lease agreements have no standard form and can be customised to meet the needs of the involved parties.
While this can give great flexibility and freedom, it can also put tenants or landlords that don’t know any better at risk of being taken advantage of. So, it’s always good to have the help of a legal professional to avoid this.
Starting A Pressure Washing Business From Home
Of course, you don’t have to rent out a specific space for your business. There’s always the option of starting your pressure washing business from home.
However, certain laws apply to businesses that are run from home.
In order to do this, you will need to make sure you have the right kind of space and set up. If you’ll be hiring employees, the environment you provide will need to meet workplace health and safety obligations. Even if your employees work remotely, as an employer, you have a duty to ensure their working environment is safe for their physical and mental health.
Prior to setting up your home as your place of business, it’s important to check with your local council first. Zoning regulations can affect what can and cannot be done from home. It’s always safer to check first rather than find out later.
What Equipment Is Needed For A Pressure Washing Business?
Getting the right equipment for your business (and knowing how to use it well) will be the basis for your business.
We can’t tell you how to use a pressure washer, but we can give you a heads on on the kind of apparatus you will need to set up.
Naturally, a power washer is required and all the equipment that comes with it – nozzles, power cords, chemicals cleaners and such. As this is a job where you will be travelling to your customers, make sure you have a vehicle that is capable of carrying all of this to and from locations.
If you’re using heavy equipment, this also carries a risk if you’re bringing it to various customers. Make sure your contracts take liability matters into account. For example, you may wish to limit your liability in case something does go wrong with the equipment and customers are affected.
However, it’s worth noting that limitation of liability clauses are only acceptable to the extent that they comply with certain laws. Once they breach laws such as the tort of negligence, the protection it offers wavers.
Remember, these kinds of equipment are often expensive. Take into consideration how you will fund your business and get the necessary equipment. You could look into taking out a loan, raising capital, crowdfunding, using your personal finances or applying for grants.
You can even rent out equipment! If this sounds like an appealing option, it’s worth doing some reading into Dry Hire Agreements – our lawyers are happy to draft one up for you.
Get A Supply Agreement
Whatever path you choose to take, when you are in business with a supplier for materials such as equipment or cleaner, it’s good to have a legally binding agreement in place here as well.
A Supply Agreement is used when certain items are being provided to your business, usually on a regular basis (however this can also be used as a one-off arrangement). It ensures both parties are clear on important matters such as:
- The products that are going to be supplied
- When they are to be delivered
- The cost of the delivery and any other fees
- Warranties
- Dispute resolution
- What happens if goods are not delivered
- Contract termination
This way, if something goes wrong, there’s already an agreement in place that can be referred to.
A Supply Agreement is even more important if you’re working with overseas suppliers. In this situation, you’d need to consult an expert lawyer to ensure your Supply Agreement is internationally enforceable.
What Are My Consumer Law Obligations?
As a business that is providing a service, it is essential to be aware of your consumer law obligations so your business’ actions can always be legally compliant.
The Australian Consumer Law (ACL) is the main regulation safeguarding consumer rights from unfair business practices. Even if your business isn’t being intentionally malicious towards consumers, certain practices might still be considered a breach of the ACL. So, it’s always best to be safe.
The best way to prevent this from happening is to know your obligations under the law and craft your business practices in a way that is compliant. This could include training staff as part of your onboarding process.
We discuss some of your main duties under the ACL below.
Misleading And Deceptive Conduct
The ACL strictly prohibits businesses from engaging in misleading or deceptive conduct. As the name suggests, misleading or deceptive conduct is leading consumers to believe something that is not true. This can either be through statements, written advertisements, affirmations and even body language – make sure you are careful.
Every form of communication you have with your customers should be as clear and transparent as possible. This includes not only face to face or over the phone communication but also advertisements, anything that’s written on your website, social media posts, marketing email and more. Ensure all staff members are trained to do the same.
Clarity and transparency can go a long way in avoiding misunderstandings.
Returns, Refunds And Exchanges
Australian consumers also have a right to ask for refunds, returns and exchanges. As a business owner, it’s good to be prepared with a policy in place in case a customer isn’t satisfied with the services that were provided.
As you are not selling a physical product, you might want to look into having a policy written up that offers refunds to customers if the service wasn’t property – of course, all of this must be done within reason.
It’s good to have the advice of a legal professional when going about this- contact us today for help.
Do I Need A Licence To Start A Pressure Washing Business?
Licences often depend on the state you are in. Some states may require a licence while others may not to run a pressure washing business.
For example, in NSW you will likely need a contractor licence to do more than $5,000 worth of repair or maintenance tasks on residential buildings.
Licences can also depend on whether your business caters to specific types of buildings or if there are any other services your business offers along with pressure washing.
In order to find out what licences you will need in your location, use the Business Licence Check.
Key Takeaways
The right amount of planning, preparation and legal protection can give your pressure washing business a good start in the world of business. To summarise what we’ve discussed:
- To start your pressure washing business, you will need to have a business plan in place, choose how you will structure your business and then register it
- Next, you’ll will need to think about getting the right legal documents, particularly for matters concerning employees, leases and the supply of materials
- If you are running your business from home, have the right set up and check your local zoning laws
- As an Australian business, you have to abide by the ACL
- Proactively avoid misleading and deceptive conduct
- Have a policy for returns, exchanges and refunds so you can be prepared for this scenario
- Business licences usually depend on the state, do your research to see what kind of licences you may need for your pressure washing business
Chat To A Lawyer
If you would like a consultation on starting a pressure washing business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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