I Structured My Cleaning Agency Business as an S Corporation (and Why It Worked So Well)
- Diem Martin
- Mar 25
- 6 min read
Updated: Apr 14
When I started my house cleaning referral agency, I wasn’t trying to be strategic about tax structures or long-term planning.
I was just trying to build something that worked.
Something that gave me flexibility. Something that made money. Something that didn’t burn me out.
Looking back now, I realize I unintentionally set myself up in a way that created a lot of advantages down the road.
And if you’re building a service-based business—especially one that you want to run remotely—this might open your eyes to a structure you hadn’t fully considered.
The Business Model That Changed Everything
I run a house cleaning referral agency.
If you’re still understanding how this model works:
That means I connect clients with independent cleaning professionals, rather than hiring employees.
It’s a model that allows the business to operate remotely, with fewer day-to-day demands, and without being tied to a physical location or managing a full team.
Over time, I layered in systems, automation, and eventually a virtual assistant who now handles most of the operations.
If you want to see how I built that out:
So today, the business runs in a very hands-off way.
I can travel. I can step away. I can go on maternity leave.
And the business continues to operate.
That part alone has been life-changing.
But what I didn’t fully realize at the time was how much my business structure would support me personally.
Why I Chose an S Corporation (Without Overthinking It)
Early on, I set up my business as an S Corporation.
At the time, I’ll be honest—it felt a little intimidating. It sounded more “official” than I felt ready for.
And I know a lot of people starting small businesses feel the same way.
But here’s what I’ve learned:
You don’t have to stay small just because you’re starting small.
And structuring your business with growth in mind can open doors you don’t even realize exist yet.
The Financial Benefit Everyone Talks About
Let’s start with the obvious one.
As an S Corporation, I pay myself in two ways:
A W-2 salary
Owner distributions (draws)
Here’s the key difference:
Your W-2 salary is subject to payroll taxes (Social Security and Medicare), just like any employee.
But your owner distributions are not subject to self-employment tax.
That doesn’t mean they’re tax-free—they are still subject to income tax.
But avoiding self-employment tax on that portion of income can create meaningful tax savings when structured properly.
Important note: You’re required to pay yourself a “reasonable salary” before taking distributions. This isn’t something to shortcut or guess on—this is where a CPA is essential.
The Benefits I Didn’t Expect
This is where things got interesting.
Because the biggest advantages I experienced weren’t the ones people usually talk about.
1. I Qualified for Unemployment During COVID
When everything shut down, my business was impacted—and I wasn’t able to actively work in the same way.
Because I was paying myself as a W-2 employee through my S Corp, I had been paying into unemployment insurance.
Which meant I was actually eligible to receive unemployment benefits.
That’s something most self-employed business owners don’t have access to.
And in that moment, it mattered.
2. I Was Eligible for Short-Term Disability and Paid Family Leave
When I had my daughter, I was able to receive both:
Short-term disability (during pregnancy/recovery)
Paid family leave (after birth)
Again—because I had a W-2 salary and had been contributing through payroll.
This isn’t something people usually think about when choosing a business structure.
But when life happens, it becomes very real.
3. It Helped Me Qualify for Real Estate Loans
One of my goals has always been to invest in real estate.
And lenders love one thing: predictable, documentable income.
Having a W-2 made it much easier to show consistent earnings.
It gave lenders something familiar and straightforward to evaluate.
For context:
I bought my first investment property in 2016
It was owner-occupied using an FHA loan
This was just two years after filing for bankruptcy
That still blows my mind a little.
But it reinforced something important:
Your financial story can change quickly when you structure things the right way and stay consistent.
The Lifestyle Benefit (This One Matters Most)
Beyond the numbers, the biggest win for me has been the lifestyle this created.
Because of:
The referral agency model
The systems and automation
The support from a virtual assistant
And the way the business is structured
I’m not tied to the day-to-day.
Even when I am working, it’s in a very high-level, hands-off capacity.
Which means:
I can be present with my daughter
I can travel without stress
I can step away without everything falling apart
And honestly, that’s the whole point.
Not just building a business…
But building a life.
If you want to see what this looks like in practice:
There Are Other Ways to Structure This
If you’re reading this and thinking, “This sounds great, but I’m not ready for an S Corp yet”—that’s completely valid.
A very common path is:
Start as an LLC (taxed as a default pass-through entity)
Then later elect S Corporation taxation once your income grows
Once you make that S Corp election, you can:
Put yourself on W-2 payroll
Take distributions alongside your salary
Potentially access many of the same benefits I experienced
If I had fully understood this earlier, I might have taken that route to start.
It can feel simpler in the beginning while still giving you the option to grow into a more optimized structure later.
A Few Honest Notes
This isn’t me saying an S Corporation is the best choice for everyone.
It’s not.
There are added responsibilities:
Payroll setup
Ongoing compliance
Additional tax filings
The need for a good CPA
And if you’re just starting out, it may or may not make sense yet.
Also, I’m not a CPA or attorney, so this isn’t tax or legal advice—just my personal experience.
If this is something you’re considering, talk to a CPA who understands small business and service-based models.
Final Thoughts
When I started this business, I wasn’t thinking about unemployment benefits, maternity leave, or loan qualifications.
I was just trying to make it work.
But looking back, the combination of:
A scalable business model
A strategic structure
And consistent execution
Created opportunities I didn’t even know I was building toward.
And that’s what I want for you too.
Not just a business that makes money…
But one that quietly sets you up for freedom, stability, and options in the future.
If you’re interested in building a remote cleaning referral agency like this, I break down the full model, systems, and setup inside my program.
Because this wasn’t luck.
It was a model that works.
Want to Learn How This Model Works?
If you want a clear breakdown of how to start and structure a cleaning referral agency:
Ready to Build This Step-by-Step?
If you want the systems, templates, and structure behind building a business like this:
Want Personalized Help With This?
If you want help deciding how to structure your business or map out your next steps:
Want to See How Others Are Doing This?
Join the community to learn from others building the same model:
Do I need an S Corporation to start a referral agency?
No. Many people start as an LLC and elect S Corp taxation later as income grows.
When does an S Corp make sense?
Typically when your profit reaches a level where the tax savings outweigh the added costs and complexity. A CPA can help determine this.
Can I run this type of business remotely?
Yes. With the right systems and structure, a referral agency can be run from anywhere.
Is this model only for cleaning businesses?
No. The referral agency model can apply to other service-based industries, but cleaning is one of the most proven use cases.
Do I need a team to make this work?
Eventually, yes. Even one virtual assistant can significantly reduce your workload and help you step out of daily operations.
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