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Insurance - Don't know what to do

Discussion in 'Business Operations' started by JonesLawnCareWV, Feb 8, 2014.

  1. TuffTurfLawnCare

    TuffTurfLawnCare LawnSite Senior Member
    Messages: 667

    From what I gathered from your posts, OP, indicate you are not in a position to do this right now. You are fretting over the costs of insurance. You have a bunch of homeowner equipment, most of which is wore out. You have a trailer that you dont trust, have little or no money in the bank, and have very little time and income.

    You may have a passion for the work and the drive to have a successful business, but it will take more than that with a family and full time schooling. I strongly recommend you get a job and start saving some money. You need to put money in, a lot actually, before you can think about pulling money out.

    I am a fan of using credit to start a business, and have recommend it to some others for a variety of reasons. However, I can't recommend it for you, as you have no way to make the payments. I took almost 10k in a loan for all the equipment I needed just to get started, had 15 weekly customers and after it was all said and done, I took no money out of the business. It paid for its self, and bought more tools, and made its payments through the winter, including the note on the equipment, the note on my truck, and insurance through the winter. It didn't pay for the power bill, water or gas, The mortgage, wifes car payment, student loans, food, or fun. That was all paid for through my other job. With this in mind, I strongly urge you to consider working and building up some capital before you dive into this, even if that means go mowing for another company while you learn the ins and outs of the business.

    I jumped into this business without any other experience in it. It cost me money as I lost some while part of the learning curve. I was ok with this, I knew it was gonna happen, but I was ok with it. I'm a do'er. I dive into things and work them out. The difference is, I have another job at $27/hr that gives me some of the best benefits in the tristate area that was there to float the business while I learned. Not everyone can do this, so not everyone should do it this way. Especially if you need to support a family at the same time. Don't act on emotion, act with a clear business mind and move accordingly. Emotion has no place in a business.

    As for your initial questions about insurance, the hard truth is your 19. Insurance is expensive under 25, no matter what the type. Statistically, you are more likely to have a claim than I am at 32. I may not be safer, but statistics show you are the higher risk. So for this, you will pay more.

    I would recommend you get a 1 million/2 million General Liability policy. It is pretty much standard. It will cover you for a broken window, or burning a house down from a brush fire your hot muffler started. As was stated, if you cause major damage and someone wins a suit against you, it will follow you into perpetuity (meaning forever, until paid). The insurance will pay the claim, instead of your wages being garnished forever.

    Also, you may want to call your auto insurance company. Make sure your sitting down, then tell them that you are going to be using your vehicle for commercial purposes in lawn care. If you thought GL was expensive insurance, wait till you get your premium on commercial auto, then add a plow rider to it...oh boy...

    My first year, I paid just over 2000 for the year for commercial auto, general liability, inland marine coverage. (Inland marine coverage covers your equipment if it is lost/stolen/damaged/etc). This year, I am gonna pay half of that going with Erie.
  2. JonesLawnCareWV

    JonesLawnCareWV LawnSite Senior Member
    Messages: 266

    Why is this everyone's go-to statement? Please, move to the area I live in and have fun trying to "get a job". Before telling someone to just "get a job and start saving some money" do a little research into the job market of the area. I have 23 (have copies of all of them) job applications currently open at different places. I've been searching for a job for over a year; mowing last season was the ONLY income I had and the only money I had to do ANYTHING with my child. I'm sorry, but unless you've had a child and been unemployed at the same time, you have no idea what I'm talking about; sitting at home day in and day out knowing that you can't do anything to help your kid despite the mass amounts of applications and interviews you've submitted (and I really don't understand this, I'm not some idiot, I graduated 14th in a class of 1200).

    Between companies requiring full time work and companies filling all of their part time positions to avoid the new Obama-care issues, there's no jobs around here, especially not for a full-time college student.

    Sorry, tired of hearing people tell me what I CANT do, rather than trying to give me advice in something that I CAN do. I managed last summer, I can manage this summer.

    Besides, wasn't the original question pertaining to what I should do about insurance?
  3. JonesLawnCareWV

    JonesLawnCareWV LawnSite Senior Member
    Messages: 266

    P.S. - I get the feeling a lot of LCO's on here have no interest in helping people; only showing off their own success. Just an observation, and certainly not true about everyone.
  4. unkownfl

    unkownfl LawnSite Gold Member
    Messages: 3,837

    I know whats up your way. It's a beautiful place but there isn't much going on in the job market that way. I use to work for a utility contractor for AEP that drives yellow trucks so I know it's tough. I also drove down 19 plenty of times on way to Buffalo. It really is a nice place to be from but not a place to live IMO. I'm not trying to knock you just that it's going to be tough in anything you do up that way. Don't get me wrong the grass isn't always greener on the other side either. Just focus on what you want and try to make every effort in the follow through and things will start going your way. There are always bumps in the road.
  5. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 10,030

    I was one of the top paid Landscape professionals in my area in 2008, when the building crash hit.
    I was unemployed for 2 years, I worked side jobs, odd jobs, fixed irrigation, started mowing some lawns…and got some momentum going, until my partner stole all the money out of the account and moved his family to alaska.
    Had no money to pay the taxes with.
    Lost my kids to family members claiming we were unfit parents and couldn't provide for them, went to court, racked up bills with lawyers, got kids back and ended up washing dishes for a living.

    So PLEASE don't act like YOU have a hard time getting work, and have a family to support.

    I finally got my house fixed up enough to sell it, and get out from under debt.
    My brother in law, who was actually worse off than I. Got my scag, pickup up, and irrigation inventory to start his own venture where he lived and we moved to Alaska, where the economy sink hole hasn't affected things nearly as much.

    Whats being said to you is this:
    You don't have experience.
    You don't have money to invest.
    and there are Adults with education, experience AND money to invest that fail miserably at this line of work, doing it for themselves every single year.

    I GUARANTEE what you have NOT done, is literally walk into an lawn care operation, and tell them "Ive mowed for myself, I want to learn, I want to work for you"
    Because if you do that, they WILL hire you, because EVERYONE in this business is looking for laborers.

    What WILL happen is you will get paid between $9-$12 an hour.
    You will work hard and long and you will not agree with decisions.
    Making decisions isn't what you get paid for.
    in a year you can expect to make gross, between 9000 and 12000 bucks, depending on what time of the year you go back to school.

    THIS IS MORE than you will make your first year working for yourself, you won't lose any money while you learn the trade, and you won't have to put any money out to earn this money, other than gas money to show up to work.

    Let me repeat myself, THIS IS MORE money than you will earn the first year working for yourself….in fact it is likely more money than you will earn for several years working for yourself, until you get momentum…. why?
    Because you will only be working for yourself part time.

    I can 100% guarantee you have not offered your services to mow lawns for someone else.
    You haven't done this, because you want to do it yourself.

    Do it, I dare ya, because I know you will get hired.
  6. TuffTurfLawnCare

    TuffTurfLawnCare LawnSite Senior Member
    Messages: 667

    Why is it everyones goto statement? Because we know what it costs to do what you want to do. We are doing or have done what you want to do. You have no money in the bank, no start up capital, no income and equipment that needs replaced. None of this is a sign that a successful business can be started right now.

    I'm not knocking your desire or want to run your own business, I am already looking forward to quitting my 27/hr job to be my own boss and its at least a couple years away. But the hard truth is that your not in a position to start a business.

    Were not here trying to show off our success, (I currently don't have any "success" as I haven't taken money out of it yet). I am more than willing to help anyone I can. I have offered what little bit of help I can to many on this board, but those people were all in a position to start a business. They had a job (many times in a green industry), had cash in the bank, and working knowledge of the business. You have none of this. Thats why people are telling you to get a job and save money. Once you have a few grand in your pocket, and some equipment, you will find most people will be more willing to help and give advice. Given your current situation, I can't give you the advice you want to hear.

    Take it as an insult, a jab or call me a jerk but either way I stand by advice. Get a job, get some start up capital, then start a business. You may think we aren't willing to help you because we arent telling you what you want to hear, but I promise you, most of us are trying to help you, but you don't want to hear it. We aren't telling you to not start a business, and give up. We are telling you start a business AFTER you have your financial house in order and can actually afford to start a business.

    Like I said before, it takes a lot of money to start a business and a few years before you can start pulling money out of it. You may not believe that because you took money out of it last year to do stuff with your children. Well, no. You took money from your business, but it wasn't able to provide the money you took. You didn't leave enough money to pay for bills like insurance. You didn't leave enough to replace your worn out equipment or upgrade equipment. Did you keep money for advertising? You have taken money out of a business that it couldn't afford to give up. Just because you mowed a few lawns that day, doesn't mean you get to take the kids to the movies. You have to keep that money in the business, so it can pay its own bills.

    Take the advice above and walk into a another LCO like described. Damn near beg for a job if you have too. You think not working and having no money is bad? Building a business is worse... You work a lot of hours but don't get to take money out of it.
    Last edited: Feb 9, 2014
  7. Charles

    Charles Moderator Staff Member
    Messages: 8,660

    Over 20 years in business and all I have done is broke out a couple of windows. I didn't get Insured until the 10th year in business when I got a auto sales lot account. My Insurance has been going up $50 per year for the past 3 years. I am seriously considering dropping it since none of my accounts care whether I have it or not. Now if I had employees then I would want Insurance because I wouldn't trust them to be as careful as I am. Anything less than $500 you don't want to make a claim on anyway since more than likely they will jack your rates up.
    No matter what anyone says, you have to weigh whether it is worth it to have Insurance. Insurance is going up so fast that I don't think I can afford it as a solo operator in a LCO saturated market.
    I really don't see why another LCO would care if another LCO has insurance. So much so that you would get upset about it:confused: Just don't cut a yard beside them and you won't risk getting hit by a rock:laugh:
  8. TuffTurfLawnCare

    TuffTurfLawnCare LawnSite Senior Member
    Messages: 667

    OP, If you decide to go at this no matter what, I want you to know that I admire your tenacity. Then the only thing I tell you is stop doing work for free. Family or not. I mow my parents lawn for free, but thats it. I don't do work for friends or family. I have turned down jobs from friends and family and will continue to do so. Business is business, friends are friends. I don't want to mix the two, and have seen many friendships broken because of mixing them.

    A business is to make make money. Working for free is NOT making you money, its costing you money in wear and tear, fuel, etc. Either start charging, or stop working. If your family doesnt take you seriously, and refuses to pay, flat out tell them that you wont be cutting until they pay for the work already completed. Don't beat around the bush and say you "forgot to cut" their yard. Tell them, they need to pay if they want it cut just like anyone else. If you want this to be a business, start acting like a business and not a kid with a mower that people can push around. After one skipped week of non payment, no more work until paid in full.
  9. PaperCutter

    PaperCutter LawnSite Bronze Member
    Messages: 1,996

    If your local economy is such that a motivated, able-bodied young guy can't get a job anywhere, what are the prospects for landing profitable accounts? That would be my biggest concern.
  10. PenningsLandscaping

    PenningsLandscaping LawnSite Bronze Member
    Messages: 1,853

    I have Geico insurance for my truck, so when I started I asked them for a general liability policy. I'm paying about 50 bucks a month. I've been with them for years though, so I get longevity discounts and discounts for not making a claim in years.

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