Am I illegal?

Discussion in 'Starting a Lawn Care Business' started by GreenBlade, Feb 11, 2013.

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  1. GreenBlade

    GreenBlade LawnSite Member
    Posts: 199

    I have been in business 2 years now. This year, however, I am really going out and starting advertising heavily.

    I just turned 16 so I am driving this year. I have ordered just magnets for my truck until I decide if I want the vinyls. I have also ordered lawn signs.

    I do not have a business license or anything like that or insurance. As I mentioned I'm 16 and have no idea how to go about that. Is it required? What do I need to do if so? I just don't want my business that I have worked hard to grow to get taken away from me or have to pay some enormous fine that puts me out of business and then some.
     
  2. Landrus2

    Landrus2 LawnSite Platinum Member
    Posts: 4,812

    You age for insurance is going to expensive. But you should try getting a business license. And liability insurance. Pesticide license I don't think at your age is possible but I'm not sure. You don't want to get caught by the : D.E.C waving:
     
  3. Moose's Mowing

    Moose's Mowing LawnSite Senior Member
    Posts: 453

    call your local township/city office or courthouse and state attorney general. Explain that you're 16 and wish to start a sole proprietorship. That's just a fancy word of saying you and your company are the same person. A sole prop would be fine for what you're doing. Most people on here are either a sole prop or an llc but there's not much reason for you to become an llc right away. It's possible to change over to an llc later if you want to. But anyways, ask about what business license you need. They should be "fairly" helpful, hopefully. If not, just keep asking questions until somebody points you in the right direction. Each state and municipality is different. Some places will require you to have a business license in each municipality you do work in. Some will require a license where your "shop" is located and in my case, no license is needed. I did get a State HIC (Home Improvement Contractor) License just in case. Again, each state and town is different. So call around and pester everyone till you get your information.

    GET INSURANCE NOW!!! Gen. liability is fairly cheap for what we do. I bet you can find a 1 million $ policy for around 500 bucks a year if you're just mowing. Your age might be a factor, but maybe not. Don't call just one insurance company either. Shop around, call several and make them earn your business. Just cause you're 16 doesn't mean you shouldn't be taken seriously. Your money is the same color as everyone else's. Just spend the time and educate yourself about insurance, premiums, deductibles, different levels of coverages, etc. Sit and talk directly with insurance agents and have them explain things until you are an expert. Don't worry about looking stupid, keep asking them to explain it over and over till you get it. That's their job. Take the time to understand everything. Anyone can cut grass, but not everyone can run/manage a legit business. If you want to be legit, the hard part comes with research and finding the hoops you need to jump through. KEEP RECORDS OF EVERYTHING. Being a legit business means filing income taxes. Make yourself a spreadsheet where you can track all of your income for each type of work you do (mowing, mulching, weeding, etc etc) Also include all of your expenses like vehicle fuel, equipment fuel, insurance, maintenance, equipment purchases, and everything else you'd spend $ on. Give it a category and maintain it every month when you do your invoicing. By doing this, you can compare what you've earned to what you spent and figure out your net profit. Don't be discouraged when you see your profit is negative for the first 2 or 3 years. This is actually an advantage come tax time. Take advantage of every tax break you can. Again, this comes down to research for state and federal taxes. An example would be that for any fuel used for "off road" purposes you can deduct like 13 cents per gallon on your fed. taxes. So keep your receipts and again, KEEP RECORDS OF EVERYTHING. The nice thing is that the math is easy, there's no calculus involved, just common sense. RESEARCH RESEARCH RESEARCH. And not just here on Lawnsite. I barely gave you enough information to be dangerous and get started. There's more to it than this but hopefully my long-winded response will help you. If not, just do what a lot of people do. Ignore everything I just said and operate a cash business under the table. I don't condone that, but it's the reality in this industry.

    Good luck
     
  4. Set Apart Lawn Care

    Set Apart Lawn Care LawnSite Member
    Posts: 188

    Generall Liability Insurance is not legally required for residential work. To be legal you need a business liscense and be paying taxes.
     
  5. What are they going to do to you if you get caught,, your sixteen and you don't have anything.
     
  6. ArTurf

    ArTurf LawnSite Gold Member
    Male, from Ark
    Posts: 3,436

    Most cities at a minimum require a business license. Insurance may not be required but of course is the wise thing to do, for instance what are you going to do when your mower throws a rock and breaks out a car window? It's happened to me twice. Good thing I had insurance.

    Do you report your earnings and pay taxes on them: state, local, federal? If not you're not operating legally. Realize that approx 25% of your NET profit will go to the government.

    When you do all of this you will learn what it realistically takes to run a business. It will hurt like crazy at first but in the long run you will be wiser sooner in life.

    For what it's worth I report people who operate illegally. Not to be mean but because it is the right thing to do. They greatly affect the market and the ability of the legitimate business to operate.
     
  7. 205mx

    205mx LawnSite Silver Member
    Posts: 2,346

    I dot do this. Makes me feel like a jerk. But I have to be honest. I'm thankful for you.
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  8. GreenBlade

    GreenBlade LawnSite Member
    Posts: 199

    I live in TN so state income tax isn't charged. I read something once that TN doesn't tax services only goods? I will get my mom to talk to our insurance provider. She has connections in that. I will also call or get her to call the city & see what I need to do.

    Thanks for everyone's help. I'm sure one day I will be very thankful for all this info. Lol.
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  9. 205mx

    205mx LawnSite Silver Member
    Posts: 2,346

    What part of TN are u in
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  10. ztman

    ztman LawnSite Bronze Member
    Posts: 1,007

    Since you are only 16, your not of age to enter into a binding contract. Therefore you will need your guardian or parents to assist you. Good to see you are trying to do things the right way starting out at such a young age. Good luck
     

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