Starting out-Ques About License and Insurance in TN?

Discussion in 'Starting a Lawn Care Business' started by Mxrider52, May 15, 2010.

  1. Mxrider52

    Mxrider52 LawnSite Senior Member
    from TN
    Posts: 297

    Hi, I am just now starting a business or attempting to try. I purchased my mower, trimmers and blower. Basically this year I am just wanting to do residential lawns and look into doing commercial next year as I think it is too late for those?

    I am just wanting to do the basic lawn care maintenance this year. No landscaping so I do not need a landscape license. But my question is what type of license do I need to register my name? This is in the state of TN.

    Also I am looking into getting insurance too. I had one recommendation of getting Shaffer insurance but I do not know what they normally charge. Do you guys have any other recommendations or anyone who is cheap? And also what type of policy should I be looking for? I know I just need general limited liability but what type of coverage?

    Thanks for the help!
     
  2. Lawn RX 10

    Lawn RX 10 LawnSite Member
    Posts: 69

    Whats up man, im in the same boat as you. I am in jersey tho, around here i am hearing i can get a mil in liability for as little as 500 a year, 250 every six months. As for the liscens i think thats pretty cheap too, like 150 or something. Im still not 100% sure what this liscens is for, i think more or less just another way your state or twship gets money from ya. All i know is ya need it. Ill prob do llc down the road but starting off forget that....Any info ya got o9n other start up nesecities would be great, and what the liscens is exactly for....Good luck man! How much did ya spend on mower handhelds and blowers and misc??? Rideing mower or WB? Im thinking doing all my start up for bout 7 grand, encluding trailer and all the shabang.
     
  3. TrueCuts LS

    TrueCuts LS LawnSite Member
    Posts: 12

    What you need to do is go to your county clerks office and get a business license. If you are located within a city limits you will also need to get a license in that city, probably at the city hall. As for insurance, I would recommend going through an independent agent to get the best rates. A $1 million general liability policy is all you should need for residential. You also need to get a commerical auto policy for your truck and trailer and also an inland marine policy for all of your equipment. And workers comp if you have any employees(you don't need this one if you are solo).
     
  4. Mxrider52

    Mxrider52 LawnSite Senior Member
    from TN
    Posts: 297

    Thanks for the responses! When I go to the clerks office what type of license do I need? Isnt there different types of licenses? What is the costs of a license?

    I spent about 2500 on the items. I already had a vehicle and trailer so didnt have to worry about that. But got the walk behind.
     
  5. dhunterd08

    dhunterd08 LawnSite Senior Member
    Posts: 314

    There are different types depending on services, but my understanding in our state to be licensed in landscape architecture or herbicide and pesticide application both require working under the supervisioin of someone with a license in that field for 2 to 3 years or a college degree in a related field. You can get your LHA(limited herbicide application) which basically means you can spray roundup for compensation and you can spread fertilizer without pesticides without any license. Insurance I have 1 million per incident 2 million aggregate with spann insurance for 525 a year w/ 500 property damage deductible, but lets face it you only need it if you hit someone in the eye and they want your wages for the rest of your life. For example i broke a screen door the other day. I will just take that out of my pocket. It happens and WILL happen to you. It is just a matter of when. My trailer liab is covered under my auto insurance with state farm. They take the most expensive classification of your vehicle and my 04 F150 is more expensive in a category that is not commercial, so it is covered under my liab limits. Hope that helps
     
  6. TrueCuts LS

    TrueCuts LS LawnSite Member
    Posts: 12

    When you go to the county clerk's office you will just get a "Business License", this is only a license to do business. There are different classes depending on what type of business, you should be in class three. The license cost $15 to get(I think), but has to be renewed yearly. The renewal cost depends on your gross income for the year. This is the only license that you will get at the clerks office. Certification and licensing for pesticide(weed control) application has to be obtained through the TN dept. of Ag. The County Clerks Office should have a website that will have of the information regarding business licenses. You can also go to www.tn.gov
    Hope this helps some!!!
     
  7. kemco

    kemco LawnSite Senior Member
    Posts: 712

    Here's how it goes in Memphis, TN.

    Business license: "required" for anyone that has a business, doesnt matter what kind of business, or what business entity you have (sole prop, S-corp, C-corp) a business license is still required. The business license allows you to pay taxes to the city and county based on gross sales. You fill out the form couple times a year and send them a check based on how much you bring in. Form isnt rocket science but can be a little confusing. Cost for the business license is about $45 here, then what ever taxes you owe.

    Sole Proprietor: Wont really need anything else.

    S-corp, C-corp, or LLC: Will cost you anywhere from $100 to $300 or so to start this kind of business entity. ($700 or more if youi pay a CPA or attorney to help you) Then you will have to file a tax return for the corp or LLC. If you have to hire a CPA to do this it will run you minimum $500 a year for the return. But from experience I can tell you that your will more than likely spend upwards of $1500 or more to have your business return completed by a CPA. S-corp and LLC you wont owe separate taxes as they are passed down to your personal tax return. C-corp you will owe taxes on the income generated by the corporation, on top of the personal taxes you will owe on any of the corp income you take as a "salary." You will be double taxed. You will also have to pay a yearly fee to the state, and you will also have to pay the state of TN a rediculously high "franchise and excise" tax based upon the income your business generates. I think it is around 8% of your gross. Again, sole prop and you dont have to worry about all of this.

    Insurance: Yeah you can probably pick up a $1mill liability for around $500 to $1000 a year. As a new company it will probably cost you more as you have no track record yet. Then I would suggest that you pick up an inland marine floater policy to protect your contents (i.e. your equipment from loss). That might run you another $500 to $1000 a year depending on how much equipment you have.

    Auto insurance: You can probably put whatever auto/truck you will be using for business on your personal auto policy, just make sure that your insurance company knows it will be also used for business, then expect to pay a 20% or more increase in your premium for this added coverage. You may need to get a business auto policy, will cost a little more, just get some quotes. Your trailer, if you pull one, will also need to be insured. You may be able to put it on your auto policy, or you may need to get a separate policy. Even though your auto and equipment is insured, if you have a wreck due to that trailer coming off its hitch etc. you will have no coverage unless that trailer is covered.

    Other Info: In TN you can apply fertilizers without being licensed (although I would make sure my liability policy also covered fertilizer application). However, if you want to put down anything, sythetic OR organic, that is a "herbicide" you must have a license for this. Couple ways to get the license - work for a spray company full time for 2 years, have a horticulture or biology degree (a BBS not a certificate) and then pass an exam, or you can take about 15 to 20 CEU courses offered different places throughout the state and get enough point to take the exam. Once you pass the exam, you must provide additional liability insurance, bonding, etc.

    To do this the "correct" way will cost you a pretty good chunk of change, but to be legit is the only way to go.
     
  8. Mxrider52

    Mxrider52 LawnSite Senior Member
    from TN
    Posts: 297

    Hey thank you for the reponses. Yea I was wanting a business license just to get my name registered so that is what my main concern was. But I will be operating as sole proprietor so I should not have to worry about all that other stuff for now.

    As far as insurance I am going to research around some and see what I can come up with. I am not planning on doing weed control this year maybe next year

    One other thing, I know if I register as a business I need commercial tags correct? I know one guy that mows, he actually has semi tags? How is this possible?
     
  9. TrueCuts LS

    TrueCuts LS LawnSite Member
    Posts: 12

    Yes you will need to get commercial tags. I Don't know what your setup is, but I would guess that the H-1 tag(9000 lbs) would be all that you need right know; $107.25 renewed yearly. The trailer also has to be registered as commercial. I don't remember the exact price but it is just shy $100, but it is a permanent tag so it is just a one time deal. The semi tag is on a trailer that is over 14ft in length
     
  10. kemco

    kemco LawnSite Senior Member
    Posts: 712

    Check with your clerks office as far as vehicle and trailer registration. Surprisingly in shelby county (memphis) trailers under a certain weight class do not have to be registered. I doubled checked that years ago to make sure. Neither one of my trailers are registered so that saves me a few bucks. And my truck doesn't have commercial tags either.
     

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