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Do You Need to be Licensed and Insured to Start a Foreclosure Cleanup Business?
I get this question a lot as the owner of a foreclosure cleanup company. New business owners are pumped with energy and excitement about getting into the hot new industry of foreclosure cleanup. But...
The reality is often new foreclosure cleanup entrepreneurs are short on cash and look for ways to lessen the initial dollar outlay in an effort to just get the doors of their new business open. Many of the new foreclosure cleanup entrepreneurs have been in similar businesses for years on a grassroots level (lawn care, painting, debris removal, etc.), but the overwhelming demand for foreclosure cleanup services via larger contractors has demanded they formalize their credentials to get work on a subcontracting level.
There are many areas in which new entrepreneurs can reign themselves in on spending when opening a new business, but licensing and insurance ain’t one of ‘em.
Do you need to be licensed and insured to start a foreclosure cleanup business? The answer is a resounding yes, yes, yes. Absolutely!
Why do you need the license and insurance when you can just start? New foreclosure cleanup business owners should realize they will be pitching professionals (realtors, brokers, lenders, larger contractors)
When a realtor or broker asks a foreclosure cleanup business owner to provide proof of their license and insurance so they can consider their bid on a job, they are submitting that paperwork on to the bank. In almost all scenarios, the powers that be at the bank are looking at not just the one estimate, but often several estimates. As a new foreclosure cleanup business owner, you won’t even be in the drawing if you don’t have the proper credentials.
Not having the proper license and insurance in this industry can cripple a new business before they even get started. When they ask for it, have it, simple. If you want to set yourself apart from the masses and be looked upon as a professional, viable business, you simply cannot bypass this step.
What type of license? The type of business license you get will really depend on the type of services you choose to offer in your foreclosure cleanup business. Services can run the gamut, from basic cleaning, to painting, repairs, trashouts and more. If you are offering extensive repairs (i.e., electrical work and the like), you will need the proper certifications and licensing. If you are offering just janitorial-type services, an occupational business license may do, depending on your county.
What type of insurance, how much coverage? At minimum, you will need liability insurance coverage for your business and you will need coverage for your automobile(s)
When starting your foreclosure cleanup business, you DON’T have to run out and buy a big shiny truck for hauling; you DON’T have to buy a 16K dumpster for your backyard; you DON’T have to purchase a bush hog for clearing properties; but you DO need be properly licensed and insured to be taken seriously, and to protect you, your workers, your property, and to grow your business.
Go to the Small Business Administration’
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Foreclosure Cleanup, LLC specializes in clearing out & cleaning up homes that have been foreclosed upon in the Atlanta area. We are the authoring company of "How to Start a Foreclosure Cleanup Business" e-book. Website: www.ForeclosureCleaningBusiness.com
Page Updated Last on: May 14, 2009