How to Start a Cleaning Business in South Dakota | The Ultimate Guide

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South Dakota Cleaning Business

Are you considering starting a cleaning business in South Dakota? If so, you’re not alone. According to Market Research Future, the cleaning industry is growing, with an expected annual growth rate of 7% between 2021 and 2026. With the increasing demand for cleaning services, now is the perfect time to launch your South Dakota LLC in the cleaning business.

In this comprehensive guide, Webinarcare Editorial Team will walk you through the process of starting a cleaning business, including the necessary steps, legal requirements, and best practices to follow. By the end of this article, you will clearly understand How to Start a Cleaning Business in South Dakota.

How to Start a Cleaning Business in South Dakota

What is a Cleaning Business?

A cleaning business in South Dakota is a professional service provider that offers various cleaning solutions to clients within the state. Depending on the business’s niche, these services can include residential, commercial, and specialty cleaning. Residential cleaning involves cleaning homes, apartments, and condos, while commercial cleaning caters to offices, retail spaces, and other business establishments. Specialty cleaning services can include carpet, window, and post-construction cleaning.

Cleaning businesses in South Dakota must follow the state’s legal requirements if you will form an LLC, such as registering the business with South Dakota’s Secretary of State, obtaining necessary licenses and permits, and adhering to tax regulations. Furthermore, these businesses must develop a solid business plan, invest in high-quality equipment and supplies, employ and train staff, and create effective marketing strategies to grow and succeed in the local market.

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How to Start a Cleaning Business in South Dakota

To start a cleaning business in South Dakota, you must follow the guidelines that include identifying your niche, developing a business plan, registering your business with the South Dakota Secretary of State, obtaining the necessary license and permit, purchasing equipment and supplies, setting your prices, develop a marketing strategy, and hiring and training staff. 

Step 1: Identify Your Niche

The first step to starting a cleaning business in South Dakota is identifying your niche. Various cleaning services include residential, commercial, and specialty cleaning. Residential cleaning involves cleaning homes, apartments, and condos, while commercial cleaning involves cleaning offices, retail spaces, and other business establishments. Specialty cleaning services include carpet cleaning, window cleaning, and post-construction cleaning.

Residential CleaningCommercial CleaningSpecialty Cleaning Services
HousesOfficesCarpet Cleaning
ApartmentsRetail SpacesWindow Cleaning
CondominiumsPost-Construction Cleaning

Choosing a niche that aligns with your skills, interests, and the demand in your local market is essential. Research your competition and determine the type of underserved cleaning services in your area. Focusing on a niche will help you attract your target customers and set your business apart. If you will create a rental property LLC in South Dakota, it is better to know about starting South Dakota cleaning business as well.

Step 2: Develop a Business Plan

A solid business plan is crucial for the success of your South Dakota cleaning business. A business plan will help you outline your business goals, identify your target market, and develop a marketing strategy. It will also help you estimate your startup costs and plan your finances. Here are the key components of a cleaning business plan:

  • Executive Summary: Provide an overview of your cleaning business, including your mission statement, goals, and objectives.
  • Company Description: Outline the structure of your business, the services you will offer, and your target market.
  • Market Analysis: Research your local market and competition, and explain how your cleaning business will stand out.
  • Marketing and Sales Strategy: Describe how you will attract new clients and retain existing ones, including your pricing and promotional strategies.
  • Operations Plan: Explain how your cleaning business will operate, including your staffing requirements, equipment, and supplies.
  • Financial Projections: Estimate your startup costs, projected revenue, and expenses for the first few years of your business.

Step 3: Register Your Cleaning Business

Before starting your cleaning business in South Dakota, you must register your business with the South Dakota Secretary of State. Here are the necessary steps to register your cleaning business:

Choose a Cleaning Business Name

Selecting a name for your South Dakota cleaning business is essential to forming. There is a complete guide on South Dakota Business Name Search for you to have a proper South Dakota cleaning business name. 

In South Dakota, if you do not wish to file your cleaning business right away but want to hold the name that you have decided on, then you can reserve your cleaning business name for 120 days. You must file a name reservation application with the South Dakota Secretary of State to keep the name. 

You can check the availability of your desired business name by searching the South Carolina Secretary of State Business Filings Search‘s website.

Hire a Registered Agent

A Registered Agent is a person or entity responsible for receiving legal documents and official notices for your South Dakota cleaning business. In South Dakota, your Registered Agent must:

  • Be a resident of South Dakota or a business entity authorized to do business there.
  • Have a physical address in South Dakota (P.O. boxes are not acceptable)

Choosing a reliable and responsible Registered Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. 

You can serve as your Registered Agent or appoint a friend or family member or hire the Best South Dakota Registered Agent Services.

Recommended: Professional services will ensure your business gets legal notices and critical mail. With LegalZoom’s Registered Agent Services, they offer peace of mind and expert support for businesses, ensuring compliance and seamless communication with state authorities. That’s why we recommend using –

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File For Articles of Organization or Articles of Incorporation

If you form an LLC for your cleaning business, you must file the South Dakota Articles of Organization, which costs $150. However, if you form South Dakota Corporation for your cleaning business, you must file the Articles of Incorporation. The Articles of Incorporation filing fee costs $150 for online filing, and $165 for filing by mail.. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

  • Online Filing: Create an account/Log in to the SOS site, get the online form, fill it, and submit online 
  • Offline filing: Send the form by mail to Secretary of State Office, 500 E Capitol Ave, Pierre, SD 57501

Recommended: Filing the Articles of Organization and the Articles of Incorporation is easy and hassle-free if you hire a professional service. We recommend using –

LegalZoom – ($0 + State Fee)

Create an Operating Agreement

An Operating Agreement is a document that contains all of your company’s organizational details. It is optional to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. Creating the South Dakota Operating Agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

Recommended: Creating an Operating Agreement is like having a personal legal guide at hand; it’s efficient, thorough, and ensures the smooth and compliant operation of your business. With LegalZoom’s operating agreement, it will protect your rights as an owner, keeping misunderstandings at bay and your business on the path to success. That’s why we recommend using –

LegalZoom – Starts at $99

Obtain an EIN 

Register your business with the South Dakota Secretary of State and obtain the necessary licenses and permits. Before that, you must obtain an Employer identification number (EIN) in South Dakota to open a business bank account or hire an employee for your South Dakota cleaning business. 

The application of an EIN in South Dakota can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom – ($0 + State Fee for LLC formation)

Register for State and Local Taxes

Depending on your business structure and location, you may need to register for state and local taxes, such as sales and income taxes.

South Dakota Sales Tax

South Dakota sales tax is a government-imposed tax on the sale of goods and services. It is generally added to the price of a product or service at the point of sale and paid by the consumer. The tax is collected by the retailer or service provider, who then remits the collected tax amount to the relevant government authority. In South Dakota, the sales tax rate is 4.50%. 

South Dakota State Income Tax

State income tax in South Dakota is calculated based on a progressive tax rate, which means that individuals with higher incomes pay a higher tax rate. The tax rates in South Dakota vary depending on income levels, with the highest rate imposed on those with the highest incomes. The revenue generated from state income tax funds various public services and programs in South Dakota.

Step 4: Obtain the Necessary Licenses and Permits

In addition to registering your cleaning business in South Dakota, you must obtain the necessary licenses and permits. Some of the common licenses and permits required for cleaning businesses include the following:

  • South Dakota Sales Tax Permit: If you sell products, such as cleaning supplies, you may need South Dakota Sales Tax Permit from the South Dakota Department of Revenue.
  • Occupational License: South Dakota requires an occupational license specific to the cleaning industry. 
  • Workers’ Compensation Insurance: If you plan to hire employees, you must obtain workers’ compensation insurance to comply with South Dakota law. As well as the EIN.
  • Business License: Your local city or county government requires a business license in South Dakota. The business license fee in South Dakota ranges from $50 – $300.

Step 5: Purchase Equipment and Supplies

You must purchase the necessary equipment and supplies to start your cleaning business in South Dakota. Some of the essential tools and equipment for a cleaning business include:

  • Vacuum cleaners
  • Carpet cleaners
  • Mops and buckets
  • Brooms and dustpans
  • Cleaning chemicals and solutions
  • Microfiber cloths and towels
  • Sponges and brushes
  • Protective gear, such as gloves and masks
  • Ladders and step stools

Investing in high-quality equipment and supplies is essential to ensure efficient and effective South Dakota cleaning services. You can purchase these items from local retailers or online suppliers specializing in cleaning products.

Step 6: Set Your Prices

Determining the prices for your cleaning services can be challenging, especially if you’re new to the industry. For you to set the prices for your South Dakota cleaning services, research the prices of your competitors in South Dakota to get a general idea of the going rates for cleaning services, calculate the cost of labor, including your hourly wage and that of your employees, and determine the profit margin you want to achieve and factor that into your pricing.

It’s crucial to strike a balance between competitive pricing and ensuring profitability. Consider hiring an accountant for bookkeeping. 

Step 7: Develop a Marketing Strategy

A well-planned marketing strategy is essential for the success of your cleaning business in South Dakota. Here are some effective marketing tactics for your cleaning business:

  • Create a Professional Website: A website is essential to showcase your South Dakota cleaning services, share client testimonials, and provide contact information.
  • Leverage Social Media: Create business pages on popular social media platforms, such as Facebook, Instagram, and LinkedIn, to connect with potential clients and share updates about your cleaning business.
  • Utilize Local Advertising: Advertise your South Dakota cleaning services in local newspapers, magazines, and community bulletin boards.
  • Offer Promotions and Discounts: Attract new clients by offering promotional discounts and referral incentives.
  • Network with Local Businesses: Establish relationships with local businesses and property management companies to generate referrals and create strategic partnerships.

Step 8: Hire and Train Staff

As your cleaning business grows, you may need additional staff to accommodate the increasing workload. Investing in your South Dakota cleaning business is better, but it is best to invest in your employees. Ensure they receive the proper compensation and training for their welfare and your company. 

Benefits of Forming a Cleaning Business

Forming a cleaning business can be a wise entrepreneurial decision as it offers a range of benefits. Here is the list of benefits to consider before you form one.

  • High Demand: With the increasing population of South Dakota, which is currently 908,414, there is a growing need for cleaning services. This translates to a high demand for cleaning businesses.
  • Flexibility: South Dakota cleaning businesses offer flexible work hours, which allows you to work around your schedule. You can choose to work part-time or full-time.
  • Low Start-up Costs: Starting a cleaning business is relatively inexpensive compared to other businesses. You can start with just a few cleaning supplies and grow your business as you gain more clients.
  • Recurring Revenue: South Dakota cleaning businesses offer recurring revenue since most clients require regular cleaning services.
  • Personal Satisfaction: South Dakota cleaning businesses offer a sense of personal satisfaction since you get to see the results of your work immediately.
  • Diverse Clientele: South Dakota cleaning businesses can cater to a diverse clientele, including residential, commercial, and industrial clients.
  • Growth Potential: South Dakota cleaning businesses have a high growth potential since you can expand your services to include additional cleaning services or target new markets.
  • Low Overhead Costs: South Dakota cleaning businesses have low overhead costs since you can operate from home and do not require expensive equipment or inventory.

FAQs

What licenses and permits do I need to start a cleaning business in South Dakota?
You need to register your cleaning business with the South Dakota Secretary of State and obtain a state business license.
Do I need to register my business as an LLC?
No, but registering as an LLC can help protect your personal assets from business liabilities.
How much does it cost to register my business in South Dakota?
The fee for registering your business in South Dakota is $150.
Do I need to get insurance for my cleaning business?
Yes, you should obtain liability insurance to protect your business from potential claims.
How much does liability insurance cost for a cleaning business in South Dakota?
The cost of liability insurance for your cleaning business will depend on factors such as coverage limits and deductible amounts.
Can I do residential and commercial cleaning with the same business?
Yes, you can offer both services with the same cleaning business.
How much should I charge for my cleaning services?
Your pricing will depend on factors like location, the scope of the cleaning job, and if it’s commercial or residential. Consider researching the average rates for cleaning services in South Dakota.
Can I hire employees for my cleaning business?
Yes, you can. You will need appropriate insurance to protect them while on the job.
Can I subcontract work for my cleaning business to other cleaners?
Yes, you can. Just ensure that the subcontractor carries their insurance.
Can I advertise my cleaning business using flyers and door hangers?
Yes, you can. Just ensure that you follow any guidelines set by the city or county.
Do I need to pay taxes on my cleaning business?
Yes, you must pay taxes on all of your business income.
Where do I file my business taxes?
You will file your business taxes with the South Dakota Department of Revenue.
Do I need to obtain a South Dakota sales tax license for my cleaning business?
Yes, you need a sales tax license for your business if you will be charging sales tax.
Where do I get my South Dakota sales tax license?
You need to register with the South Dakota Department of Revenue.
Do I have to charge sales tax for residential cleaning in South Dakota?
No, but sales tax must be charged for commercial cleaning jobs.
Do I need a federal tax ID number for my cleaning business in South Dakota?
Yes, to obtain a tax ID number, you need to register your cleaning business with the IRS.
How do I set up a payroll for my cleaning business?
You can use a payroll service or set up payroll yourself.
When is payroll taxes due for a cleaning business?
When the United States Government assesses quarterly payroll taxes for businesses.
Can I use my personal cleaning supplies for my cleaning business?
Yes, but then you will not able to track which supply was from where. It’s better to have separate supplies for business.
Do I need to provide my own transportation for my cleaning business?
Yes, you need to obtain your transportation for your cleaning business.
Can I advertise my cleaning business online?
Yes, you can use various platforms like social media to promote your cleaning business.
Can I advertise my cleaning business through direct mail?
Yes, you can. Direct mail campaigns are widely used for promotion into cleaning businesses.
Can I deduct expenses for starting my cleaning business on my tax return?
Yes, you can deduct most expenses incurred in starting your cleaning business.
How many people can be in one cleaning team?
The team size for a cleaning job will depend on its scope.
Are there high-demand areas for cleaning businesses in South Dakota?
Janitorial services and carpet cleaning are all in common demand.
What kind of cleaning equipment do I need to start a cleaning business?
A vacuum, mop, cleaning chemicals, and other equipment are necessary to start a cleaning business.
How do I come up with a name for my cleaning business?
Just brainstorm to come up with name that describes your service.
Should I buy or lease my cleaning equipment?
Either buying or leasing equipment depends on your preference, budget, and future plans for your business.
Should I use my personal cell phone for my business calls?
No, it’s better to use a separate number to avoid confusion.
How do I keep track of my income and expenses for my cleaning business?
You should record all transactions in a ledger or accounting software. It’s better to hire an accountant also.

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Conclusion

Starting a cleaning business in South Dakota can be rewarding and profitable if you follow the right steps and adhere to the legal requirements. By identifying your niche, developing a solid business plan, registering your business, obtaining the necessary licenses and permits, purchasing high-quality equipment and supplies, setting competitive prices, developing a robust marketing strategy, and hiring and training a reliable staff, you will be well on your way to launching a successful cleaning business in South Dakota.

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