10 Most important things!

Discussion in 'Lawn Mowing' started by The landscaper, Jan 24, 2005.

  1. The landscaper

    The landscaper LawnSite Senior Member
    Posts: 845

    If i were to start up a lawncare business tomorrow. What are the first 10 things I will want to do to get everything ready to go and be legal.
     
  2. traman

    traman LawnSite Senior Member
    Posts: 712

    ill give you number 1 in my case . dont quit your day job until you have some type of cust base, and have plenty of reserve cash ive going on my third year and still not making any real money am in debt up to my a$$
     
  3. YardPro

    YardPro LawnSite Gold Member
    Posts: 3,563

    remember that first and foremost you are a business, and the product you sell is lawncare ( a quote from someone else here).

    run it like a business. figure out your operating costs, and required profit, and use THOSE combined numbers to set your rates.
     
  4. Wells

    Wells LawnSite Member
    from SLC UT
    Posts: 0

    The Landscaper,

    1. Create a business plan: decide what services you are going to offer, what your pricing structure is going to be, how your business is going to be structured, how soon before you to need employees, how you will do your accounting, the profit you expect to earn, loans that might be required, etc. etc. etc.

    2. Decide on what type of business you want to operate under. (LLC, Sole Proprietor, S-Corp, etc) I would recommend a lawyer or a tax accountant to help you write your articles of incorporation.

    3. Register for a tax id# if your required to have one for your type of business structure.

    4. Decide on a Business Name and register it with the State if you're required to do so.

    5. Get a business license for the City in which you live.

    6. Get other required licensing such as pesticide license and landscaping license if required and you plan to offer those services.

    7. Get liability insurance and workmans comp if you will have employees.

    8. Start purchasing required equipment to do business (trailer, mowing equipment, accounting software, etc.)

    9. Start Advertising, have business cards made.

    10. Make Lots of Money.......


    I'm sure that I left some stuff out but that should give you a good start of things that need to be done prior to firing up the mower.
     
  5. The landscaper

    The landscaper LawnSite Senior Member
    Posts: 845

    Thanks. I have been in the business for a couple years. I just wanted to do this to make sure I havent missed anything and also, it seems like a good way for new people on here to get in swing of things. It will save them from asking 10 questions. Just give them a checklist so to speak.
     
  6. LHlandscaping

    LHlandscaping LawnSite Member
    from PA/ SW
    Posts: 100

    1) Business plan. Include what type of landscaping market you want to target. Example mowing is less expensive to capitalize than hardscape however, hardscape contractors seem to do better financially than a strict mowing operation. If you plan to do both you may want to include some other investors to help you take the risk.

    2) Market research. Can your area realistically support your plan? If every hick is running around cutting for beer money I would stay away from the business.

    3) Check if any existing operations are willing to sell you their existing business. Mine will be on the market in 2010 so check back.

    4) Figure out how much you will need to spend to just open your doors. Equipment, incorporation, accounting, advertising etc. plan on spending 70-100k to get pro grade equipment.

    5) Establish lines of credit through your new corporation for local suppliers. This way when you need $5k worth of wallstone etc. you don't have to front the cash right then and there. However be sure you pay these people on time. THere are alot of contractors out there that screw over suppliers and word travels very fast.

    6) Try to establish a passive income for the corporation also. Example, on your lot you could also build storage units and or sell mulch etc. To help you cover the mortgage and property tax and accounting in slower months. Remember this business is seasonal. One month you can gross $15k and the next you can gross $100. It takes cashflow management at its best to succeed in this business.

    7) Discover if you have any personal cashflow management problems. If you do you will need to address them before you begin. I am still training myself to think like a business owner not an employee. And it is quite a change. HAving a business will not solve your money problems if you cannot first correct your personal spending habits. If done correctly you may not see any profit from the business for 3-5 yrs. Are you prepared to do this?

    8) Determine your investors exit strategy. THey only want to know how soon they will get their money back. Telling them you will do everything will only scare them away. Don't be afraid to think big. I'm not saying to go buy 30 trucks but think of yourself also. It's very stressful not having any help and trying to be the laborer, accountant, marketer, salesman and everything else. Banks and investors know that lending money to a one man operation is very risky.

    9) Get a feel for employees in you area. Whats to going rate for a landscape professional? Can you train them? How much is workman's comp. How will you retain a good employee in the off season?

    10) 5 year cashflow projection. Remember to show profit after 3 years or no one should invest with you to include yourself.

    Remember that this is a big step and should not be taken lightly. Many people think that its only landscaping all you need is a mower and a truck and if you only want beer money they are right. A true business requires so much more. However, I have found that for my personality and values I truly enjoy it for now. I hope this helps you out.
     
  7. Mueller Landscape Inc

    Mueller Landscape Inc LawnSite Senior Member
    Posts: 489

    Read the book "E Myth" by Michael E Gerber.
     
  8. snap12.5

    snap12.5 LawnSite Senior Member
    from Ohio
    Posts: 288

    Wells - can u elaborate on the forms of business organization -LLC, sole proprietorship, etc??? what are the differences and why pick one over the other???
     
  9. The landscaper

    The landscaper LawnSite Senior Member
    Posts: 845

    I wish I would have gone through a checklist like this when I was getting started. I think it would have helped so much.
     
  10. Wells

    Wells LawnSite Member
    from SLC UT
    Posts: 0

    Snap 12.5,

    There are 5 commonly used business Organizations:
    Sole Propriatorship
    General Partnership
    Limited Partnership
    Corporations (S-Corps and C-Corps)
    Limited Liability Companies (LLC)

    One of the primary considerations in selecting a business organization is protection of a business owner from liability. Also to consider is the transferability of ownership rights, the ability to continue as a business in the event of the death or withdrawal of one or more of the owners, the capital needs of the business, and tax liabilities.

    Here is a link to the Small Business Administration that will explain in more detail the advantages and disadvantages of each type of business structure.
    http://www.sba.gov/starting_business/legal/forms.html
     

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