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Insurance - Don't know what to do

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

  1. Roger

    Roger LawnSite Fanatic
    Messages: 5,929

    There is lots of advice in this thread, most of it good, IMO. Go back and read TurfTurf -- the posts are simple, straight-forward, easy to understand. Also, the advice to work with small business counselors. As somebody said earlier in a meeting, lots of good advice in 90 minutes. Some places offer day-long seminars that cover all aspects.

    Getting hung up on the costs of insurance at this stage is to be in the trees and miss the forest. Yes, it is important and necessary (should be $1M for liability, $2M is only a little more expensive), plus property damage. But, the business plan here is critical.

    Oh yes, financial management software is a necessary component. Quickbooks works for many on LS, and is only about $150. As for scheduling, with your small operation, 3X5 index cards are all that is necessary. Punch a hole in the corner, put them on a ring, and continue to insert them into a new location after every property visit. The ring insures nobody gets lost, and is continuious. Inexpensive, works well, and is easy to understand.

    If finding a job in your area is so difficult, what is the potential for finding lawn service customers? Is the profile of potential customers include those who consider hiring lawn services absolutely necessity (e.g. elderly who cannot do it for themselves), or discretionary (work that can be done by a homeowner, but chooses to hire it out)? If the employment pictures is so dim, perhaps the pool of potential customers is also very small. What I am asking, "Is there a market for your services?" Family is one thing, but finding independent folk needing your services is something else. If the market isn't there, then your entire plan may be a moot point.

    Remember the demise of most start up businesses -- undercapitalization. From what we've read here, you may be in that pool.

    To the OP, I really appreciate your courage to lay yourself out here, and willing to dialogue. And, as somebody else said, your tenacity. Good!!! Perhaps others considering starting a business will read this, and start to understand that starting a business isn't so easy. This thread lays out many of the obstacles that are in the path, many of which are unrelated to the insurance question. In the big scheme, a start-up in lawn services is one of the easiest -- relatively low cost (yes, much as been said about capital, or lack thereof), no particular training or skills. So, it is attractive to many. For more specialized business startups, the obstacles are much more complex. I mentioned day-long seminars about setting up a new business. Go to one of these seminars, and you will quickly understand the simplicity of lawn services.
  2. JonesLawnCareWV

    JonesLawnCareWV LawnSite Senior Member
    Messages: 266

    Conversing with a few insurance agents via email about quotes. Only one has actually called me; asked questions, seemed to know the industry, informed me he also did lawns through college, yada yada. Hit me with $437 for $1mil w/ $2mil aggregate.

    Time to research what this aggregate deal is. Told you I've never dealt with insurance! I feel like a child when they ask me certain questions because I just simply don't know what they're asking!

    That quote eases my tension. Now the question is when I do accept a quote and agree to the contract or whatever should I pay in full or ask to make payments? I have plenty of funds to pay it in full, but it would be nice to make payments as I am mowing.
  3. JonesLawnCareWV

    JonesLawnCareWV LawnSite Senior Member
    Messages: 266

    Also, have I heard guys saying you can write off insurance cost on taxes? As sole-proprietor?
  4. unkownfl

    unkownfl LawnSite Gold Member
    Messages: 3,837

    Short answer yes. Long answer for you NO. You won't be able to itemize more than your standard deduction with your income you stated.
  5. JonesLawnCareWV

    JonesLawnCareWV LawnSite Senior Member
    Messages: 266

    Thanks! Good to know. How about cost of equipment/maintenance? Just curious
  6. zabmasonry

    zabmasonry LawnSite Senior Member
    from C. VT
    Messages: 315

    First off, I commend you (OP) for being strong-willed and stubborn enough to try and make something for yourself.

    As others have said, contact your local Small Business Development Corp. they will help you with all of this the website for WV is http://wvsbdc.wvcommerce.org/ A quick look found several councilors in the Charleston area. As for starting a business on your own, all I can say is expect an up-hill battle. Starting a business is as much stress as anything that will happen in life, and I don't know what I would do If I couldn't occasionally call on my dad for council. Hopefully your SBDC councilor can help some with that.

    Be careful, making money probably isn't as black and white as you might think it is, and owning a business is nothing like a regular job when it comes to take home pay. It is awfully easy to work incredibly hard, and have very little at the end of the day. I think what the folks on here saying "get a real job" are simply trying to help you find good income while you're in college. If you're in school for electrical engineering, I'm guessing that you're not planning on trying to grow this business into a full time endeavor when you graduate. The only folks that I know who have successfully run business while in college, were folks who were growing it to have a full time job when they were out, and didn't see a lot of cash out of it while in school. If you are having trouble finding a job, that sucks, my only suggestion is to go in person to companies you want to work for, that you could learn something from, and ask if they need help. That approach has never failed me. Lastly BTW trig identities are about as fundamental to engineering school as anything, as are derivative identities and integral identities, put some friggen skin into studying all three, I say this as somebody who failed/dropped out of engineering school.

    As others have said, $1500 is a joke of a price on a GL policy. I'm glad to hear that you've found a more reasonable option. As for signing on the dotted line: you need to be able to trust the agent to adequately insure YOU (not somebody like you, but actually you) for a fair price, if you don't trust the first person you talk to, then find another agent. Personally I don't want the lowest price when it comes to insurance, I pay a slight bit more then the lowest price, but I have an agent that when anything comes up I can call their cell phone and get help.

    The 1/2 policy covers any single event up to 1 mill and up to 2 mil in any given year. Kinda ironic since almost all companies would drop you after a single 1 mil claim or several smaller claims, but alas.

    As other have said, a GL policy isn't for the small stuff. In fact right now if I did 10k in damage, I'd probably pay out of pocket instead of make a claim. Your GL policy is for when the unimaginable happens and (probably by accident) huge losses are encumbered, Unless you feel like starting your adult-hood in court and filing for bankruptcy, get a mil of GL insurance.

    best of luck
  7. zabmasonry

    zabmasonry LawnSite Senior Member
    from C. VT
    Messages: 315

    only if you're using a 1040EZ, which I don't think that you could use anyways since you need to file a schedule C and a schedule SE.

    If you file a 1040 long form with a schedule C and SE you take business expenses (including insurance, fuel, equipment depreciation and repairs) as a deduction. You will however have to pay self employment taxes on net (sales-expenses) business income, and income taxes on all of your income (business and otherwise)
  8. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 8,520

    sounds reasonable.... whats your deductible
  9. unkownfl

    unkownfl LawnSite Gold Member
    Messages: 3,837

    Hes making 1500-2k a year. It doesn't matter what deductions business wise hes not paying any income tax.
  10. zabmasonry

    zabmasonry LawnSite Senior Member
    from C. VT
    Messages: 315

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