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How do I grow the business?

Discussion in 'Business Operations' started by newbomb, Feb 11, 2005.

  1. newbomb

    newbomb LawnSite Senior Member
    Messages: 391

    I have been a part timer for years and will go full time this summer. I expect to have 30-35 clients returning this summer. I want to increase my weekly mowings to 50-55 clients. I have read ideas about marketing and how much work a solo operator should be able to handle. I am clear on that.

    My goal is to work alone this year as close to max capacity as I can. then, next year hire a helper for the mowing season and increase the client list to 75-100.

    My trouble is I don't know enough about the business end to go about hiring one legitamate helper for the summer. I believe workers comp is based on salary of the helper and for one helper it would be reasonable. Helper working 30 or so hours a week. College kid hopefully.

    Questions are: What hourly rate is reasonable for reliable help?
    What besides workers comp do I need to hire a kid?
    Can I do all this as a sole proprietor?
    Do I have to do payroll with withholdings or can I pay the helper as a sub and use a 1099 at the end of the year(workers comp on him of course)?
    What are the nuts and bolts of hiring a part time helper for the mowing season?

    I am trying to plan for next season's expansion now so I have time to learn and budget to do it right.


  2. walker-talker

    walker-talker LawnSite Platinum Member
    from Midwest
    Messages: 4,771

    Well Paul, seems like you came to the right place to find out. I will admit that I have never really employed anyone on the books, but I will be faced with this issue either this year or next. I am by no means an expert, but I might be able to help some.

    What hourly rate is reasonable for reliable help?
    There are industry standards to what to pay your help. Demographics is going to play a big part in that. You might find help with some of your competitors. The ranges people have stated on this site is anywhere to $7 to $10 for new inexpierenced help.

    What besides workers comp do I need to hire a kid? Call your insurance agent for this one. I believe if the help is part-time, you don't have to have workmans comp or they are automatically covered if their gross salary is less than $10,000 per year. If you don't have general liability insurance...get it!

    Can I do all this as a sole proprietor?
    Yes you can, but it give you no personal protection. Most will advise you to speak with a CPA to see what the best form on incorporation is for you. I need to do the same and I am only guessing that it will be either S-corp or LLC. I only guess that because that seems to be the most popular with LCO's on this board. I will be doing that this year or early next year.

    Do I have to do payroll with withholdings or can I pay the helper as a sub and use a 1099 at the end of the year(workers comp on him of course)?
    I would not advise paying the helper as a sub unless they are going to use their own equipment. There are strict restrictions on who you can sub work to and this is one of them.

    Sorry I couldn't have been more help. If you use the search feature on this site it will give you a wealth of information.

    Good luck
  3. Tvov

    Tvov LawnSite Bronze Member
    from CT
    Messages: 1,157

    Do you have an accountant that you use now? If so, ask him/her some of your questions. If not, ask around and get one who is familiar with small business.

    Talk to your insurance agent. They should be able to arrange the business and worker's comp for you. You may want to call around and talk to some other agents, but if you are happy with your present one, stick with him!

    Don't go the 1099 route. The rules regarding them have become strict. Basically, no part time worker qualifies. He has to be an actual contractor, hence "sub contractor".

    Being a sole proprietor is fine and easy. If you don't own a home or a lot of personal property, it should be fine. You should talk to a lawyer or accountant about it though.

    Laws vary, sometimes a lot, from state to state. This is why it is important to talk to people familiar with the laws in your state.
  4. ODwyerPW

    ODwyerPW LawnSite Member
    Messages: 72

    I started last year, right away as an LLC. Trucks, Trailers and All Equipment are in Business name. I had general liability insurance for $1mil.

    I will relate what I've put in place since 2005.

    All Help are now Employees (no 1099s). So I need unemployment insurance and workers comp to cover them in addition to my general liability I already had. Also had to submit to my auto insurance agent the info for each person that would be operator truck/trailers. You also need to withhold taxes for these employees. All of this can be difficult and expensive (in the case of workers comp and unemployement insurance, where you have to estimate your yearly payroll and pay up front!). Best advice is to hire a payroll company for yourself and employees. That way you pay all taxes and insurances as your go! No estimating.

    A good idea to provide uniforms for yourself and your employee. I do. Hats, shirts, coats. I require them to wear black steel toed shoes/boots with good tread and Khaki/Olive pants/shorts. No baggy clothes (it's unprofessional looking and a safety hazard).

    Also need to provide safety gear. You don't like to think about injuries, but your help is never as experienced or careful as you. I provide gloves, googles, hard hat (for the occasional small tree cut down) and ear muffs.

    Take the time to lay down safety regs (wear your gear, don't replace a trimmer spooler with the engine running, don't unplug a grass chute with the mower running, etc.) and make sure you follow them yourself.
  5. SOMM

    SOMM LawnSite Senior Member
    Messages: 425

  6. CNYScapes

    CNYScapes LawnSite Senior Member
    Messages: 916

    Dont even bother trying to handle the payroll stuff yourself. I use paychex and they handle all my payroll and workers comp. This way I can concentrate on my business and they can do the payroll crap. I just call them once a week with the hours, the next day all the paychecks show up in my mailbox.DONE

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