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New business:sole prop., partner, LLC, corp, ect.

Discussion in 'Lawn Mowing' started by texaslawnman, Oct 2, 2004.

  1. texaslawnman

    texaslawnman LawnSite Member
    Posts: 15

    Well, here’s the deal. I’ve been working as a lawn care foreman/worker the last seven years for a realty management company (apartments and homes). I quit my job last month and am making ends meet working for a friend as a grunt electrician. I’ve got a few grand coming to me next month and plan to buy the same equipment (36”mower, trailer, trimmer, blower, act.) that I was using. With the flexibility I have, I wanted to phase into the lawn mowing business. I figure I need to advertise soon in the yellow pages, and then later in the local environments. Anyway, I would appreciate some input on whether I should start my business as a sole proprietor, partnership, LLC, ect.. I Live in TX, and I’m not sure that matters, but I would appreciate any help. I don’t have a lot of money, so estimated cost of such declarations would also be appreciated. I am also married and a partnership there or to others would be a possibility. Please post or email me your advice. Thanks in advance to all of you for your advice….Turk aka txlawnman
  2. midtnstone

    midtnstone LawnSite Member
    from mid tn
    Posts: 76

    i would go with sole proprietor and for the partner i would stay away from it but that is my opinion. if you work for yourself you can pretty much do it your way by that i mean you can grow your company as fast as you want or as slow as you want. dont forget that is your partner runs up a bunch of credit in the business and leaves town guess who is stuck paying the bill. no partner for me
  3. No partner it cost to much and they love to run
  4. Coffeecraver

    Coffeecraver LawnSite Senior Member
    from VA.
    Posts: 793

    No partner

    Wait until you have done flyers see the responce and handle the incoming work.The yellow pages may overwelm you with work that you can not keep up with.The yellow pages is a big expence for a new business.


    K- KEEP
    I- IT

    Go slow and handle what you can.
    If you buy thousands of dollars of equipment with no contracts
    It may be a while before you recoup on your investment

    While you are waiting ,get some info on the book work,possible commercial
    locations,insurance options,design your flyer,come up with cost sheet so you
    can estimate jobs on the spot instead of mailing one or making a return visit.

    Get your wife involved bookeeping,flyers,mowing,etc...she would most likely be your best option for a partner since you both will benifit.

    I use my kids alot,id rather keep the money in the family.

  5. Precision

    Precision LawnSite Silver Member
    Posts: 2,995

    Go LLC. Unless Texas has really weird laws regarding them it is the best way to protect your assets without tons of hassels and extra expense. This way if something happens and the company gets sued they can only take the company and not the house and car. You can avoid partner problems but can have investors this way too.

    I would skip the yellow pages. VERY expensive and usually not such a good return on investment. Flyers, ads in local specialty papers (usually pretty cheap), Word of mouth, cold calling commercial accounts.

    I haven't done any flyers, but have done the others. First year. 25 steady residentials all on contract and 5 commercials on contract. The work is there.

    Get GL insurance. No commercial work without it and just crazy not to anyway. Work all year and have one thing happen and the business and everything else is lost.

    As coffee craver said. Get your ducks in a row. Get your paperwork done before you start mowing. Makes life so much easier in the long run.
    Turf Medic likes this.
  6. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    There is no question about this. Unless you have TONS of personal assets and TONS of money in the bank to protect at this point there is NO NEED to go Corp, LLC, etc as that really is the only benefit they would provide for you and as a one man show the required constant paperwork and Corp Taxes would not be worth the benefit at all if you really don't need to protect assets. Also be aware that if YOU own the Corp or LLC any personal assets COULD still be on the line for things like back taxes, etc and the thought that many say they can't is incorrect.

    DO however get your Business Lic, any required App Lic, and most of all Commerical Liability Ins.

    Simply put a Sole Prop at this point is all you need and it will also make filing your 1040 much easier.
  7. GrassBustersLawn

    GrassBustersLawn LawnSite Senior Member
    Posts: 983

    Sole Proprietor is simplest & easiest & cheapest way to go. Work Comp insurance (when you get employees) counts YOUR SALARY if you are Corp. If you are Sole Prop you can OPT OUT for yourself, saving you probably $1500 a year at least. Since you are owner, MOST HEALTH INSURANCE covers you anyway for injuries while on job (check with your health carrier). Sole Prop has draw back of having your personal assets (house & car & bank account) "at risk" if you get sued for something. That is why you NEED Genl Liability Insurance of at least $1 mil. No monthly meetings and board minutes to keep and record like a Corp does.

  8. sparechange

    sparechange LawnSite Member
    Posts: 33

    For what it's worth, you might also consider making your wife the owner. This makes it a minority owned business and will give you a slight advantage if you decide to bid for government contracts
  9. Turf Medic

    Turf Medic LawnSite Bronze Member
    Posts: 1,073

    Depending on your abilities and potential costs of setting it up, I would go with the LLC. We set it up on our own, cost about $150 total, most of the forms were on our state's website, a couple hours of work and it was done. I would like to qualify this statement with it may depend on your goals and plans for your business. If you plan on making a few extra bucks for the new boat or beer, don't worry about it, but if you have aspirations of growing the business and having employees, IMO it makes sense to set up the business while you are still small. Easier to learn the paperwork and regulations while you are by yourself and a handful of customers than it is to change everything when you have a boatload of clients and employees to deal with.

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