Warnings Against HazMat and 1099s

​I met a young lady named Brittany Holter on a Zoom call in December 2022. Brittany is a mom, military wife, and new cleaning business owner. She is growing fast and starting to struggle with the good problem of too much work. Her niche is in AirBnB. Brittany reached out to me by booking a free coaching call on my website. Our conversation was wide-reaching and I certainly asked her permission to record in case we talked about anything that could help other listeners like herself.  Brittany agreed and we did! There were 3 topics that we touched on that I wanted to share in one episode. They are how to deal with hazardous material or HazMat, scaling, and the do's and don't with 1099 subcontractors. I have included a clip from our hour-long free coaching call to give you the highlights.

HazMat - This is a classification of cleaning that you need special training and PPE before you do. Don't be a people pleaser and agree to clean whatever is left, especially in an AirBnB scenario. Either decide that you don't do HazMat or get the proper training and equipment and charge the specialist prices. Otherwise, you're losing time and money and you're putting your health in jeopardy.

Scaling, W2's, and 1099s - It's hard to scale. That's why so few do it successfully. The best ones build strong systems and hire with W2 employees. They train and trust. I shared a brief summary of my experience with Brittany which I capture in this clip. The lazy and quick-fixers just hire helpers that they call 1099's. They do this and have no idea what that even means. The IRS highly regulates the 1099 subcontractor vs the W2 employee. They don't want to get short-changed in taxes. Many cleaners think they can just hire them, call them subs or 1099's, avoid all taxes, and treat them like employees. You can't have it both ways. You either have to hire an employee that you can find, employ, insure, pay taxes for, uniform, train, equip, inspect, correct, and so on. Or you have to outsource the work to a third party independent contractor that has their own supplies, insurance, training. They have their own business with their own customers. You are simply outsourcing work to them. There are do's and don'ts that the IRS highly regulates. Here's an article from the IRS.

1099's Do's and Don'ts, Pros and Cons - I'm adding this as a bonus to the call with Brittany. I am not the expert here, but I did take courses early on in my cleaning career through the experts at Service Magic (now HomeAdvisor). I will refer you to the expert. Ed Selkow is a friend. His double interview on the past, present, and future of the cleaning industry is fascinating. Ed runs the Janitorial Subcontracting Network Facebook group and so much more. Ed knows subbing! Here's the basics from Ken.

Do's & Don'ts -- Do subcontract to a legitimate cleaning company that is fully insured and competent to do the work you need done. Do charge more for the job so you can afford to sub it. Do issue a 1099 at the end of the year to acknowledge the use of subs in your business. Don't hire a helper and hope to not pay taxes. Don't give them your branded material to wear. Don't give them your supplies. Don't assume they can use your insurance. Don't train them or correct them. These last 'don'ts' can be switched to 'do's' if you hire them as W2 employees. If you knowingly or unknowingly misclassify a worker, the IRS will not only get you for current employment taxes unpaid. They will hit you for all past unpaid taxes plus all fees and interest. This can be massive and could wipe you out. Don't hire a subcontractor that is really an employee.

Pros & Cons -- Pros first. True subcontractors are more profitable to you as you don't have to pay taxes on the work. They do. You also don't have to pay for supplies and insurance. They do. You can scale across regions and countries with subcontractors. You simply find the work and then find businesses that want the work. You keep a percentage and never have to clean. Here's the cons. You can't train or direct them. You can't supply them or uniform them.  You can't discipline them when they don't show and they won't. This was a very short list. I see this all the time in the cleaning Facebook groups.

Bottom line. If you're a solo cleaner or in the process of scaling, you aren't alone. Don't just assume or do what someone told you would work. Seek a mentor like Brittany did. I'd love to hear from you too. Book a free coaching call with me on the Smart Cleaning School website at www.smartcleaningschool.com. Make sure to check out the many free & paid resources available on the website as well. I look forward to helping you scale properly and restore your peace!