Ma specific questions

Discussion in 'Network: North' started by Cruz717, Nov 4, 2012.

  1. Cruz717

    Cruz717 LawnSite Member
    Messages: 17

    Hello everyone.
    I have been on this website for a few years, sitting back learning listening, and I have my savings lined up and am ready to move forward in setting myself up legaly.
    my question is and I have searched quite a bit,
    as far as business registration,license etc.
    what are my first steps, where do I go to get my self set up legally.
    do I have to resgister in the state as well as the town I am in.
    and where do I go, the town hall,registration office?
    do I need certain qualicications to show the state, refrences
    I have been on, but I cant find anything specific to lawn care

    Any links or advice appreciated..
    thanks guys
  2. Cruz717

    Cruz717 LawnSite Member
    Messages: 17

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  3. GreenI.A.

    GreenI.A. LawnSite Silver Member
    Messages: 2,131

    Much of it depends on how you plan to structure the company. If you are just doing a DBA, then you can file the paperwork with the town clerke at Marlborough City Hall. If you are doing an LLC or other form of structure then you must file an Article of Incorporation with the Secratary of State's office, for that you will need to have an attorney file the paper work for you. If you will be solo for a while, then a DBA with the the city is your easiest and cheapest option. Once you get larger and have employees, you can switch from a DBA to a formal organization for protection and tax purposes.

    You will need to establish your company (whether DBA, LLC, Corp etc...) in order to open a business checkig account in order to accept checks made out in your company name. You will also nee this to register your vehicle as commercial, to get commercial auto coverage, and general liability insurance. Some vendors will also only give you commercial/wholesale discounts if you are a liceansed company.

    As far as qualifications or specific liceanses go, that all depends on the services you offer.

    What kind of services to you plan to offe?

    Messages: 1,343

    He pretty much nailed it. Hook up with a good accountant as well.
    I grew up in framingham, i know your area well.
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  5. Cruz717

    Cruz717 LawnSite Member
    Messages: 17

    Thank you so much for your responce, it is greatly appreciated.
    As soon as I saw your responce I headed straight to the Marlborough City Hall.
    I explained to the city clerks office that I was interested in looking into starting a lawn Care service in the area.They handed me a business Certificate Application Guideline .
    In short once the business is said to be suitable for the town, I would have to go on the website and research the business you are interested in starting and find out what licenses and or permits are required.
    Which I did, but can not find a section for lawn care services.
    Second I need to obtain a form from the Ma department of revenue, a certificate of good standing, basically checking if I owe the town any taxes, once that is obtained have the city tax collector sign off on it .
    Third Workmans Compensation Affadavit must be completed
    Once those steps are completed and the 20 fee is paid I recieve a certified copy of the business certificate.
    You know its funny I had so many questions and I get there and my mine goes blank.
    I am planning absolutely to obtain insurance before stepping foot on a lawn, but I saw no mention of insurance in my pamphlet.
    Can I start conducting business with this certificate of business.
    I saw on the website that the D.O.R Department of revenue, gives out classes to small business to explain my tax responsability, but no classes are scheduled anytime soon.
    I do have a really interesting question, for you all now that I have your ear, you have done this and are doing this and know what your doing.
    I have 11,000 dollars put aside , I know its not alot but its what I have at the time, had a little more but life happened...
    If you guys where me , knowing what you know now . How would you go about using your savings.
    I have been doing this for 20 years, but for some one else. I do not own a truck , consider this when planning my
    thank you
    Also I to grew up in framingham, class of 92 at Keefe tech

    Messages: 1,343

    Framingham north class of 88
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  7. GreenI.A.

    GreenI.A. LawnSite Silver Member
    Messages: 2,131

    general liability insurance is not required by law, but someone operating without it is completely stupid and is not only putting themselves at great risk, but they are putting their customers and the public at whole in extreme risk. If you want, do a search of my posts about insurance. I have told stories of guys I know and different situations in which they had no insurance. I am glad to see you plan to be responsible and get insurance before starting.

    You will need commercial auto insurance. Massachusetts law says that if you are using a vehicle for commercial purposes (ie doing landscaping) you must have commercial plates and commercial coverage. If you operate with regular personal plates, registration, insurance, you are essentially operating an improperly registered and improperly insured vehicle. The law considers an improperly registered/insured vehicle the same as operating an unregistered/uninsured vehicle. I have told the story on here of a guy I know who got in an accident caused by someone else, he was driving a personally registered truck and the officer noted in the accident report he was using it for landscaping. Long story short, insurance refused to cover it, he was sued for hundreds of thousands of dollars in damage and lost everything, his wife and him are on probation with suspended sentences until it is paid off.

    As far as what to spend your money on, that is too hard to say. Everybody's business is going to be different. Some guys would use it for an older truck and equipment. I would get a loan for a newer more reliable truck, newer equipment, and save that cash for marketing and for capitol until the business takes off. I don't think I saw it anywhere, but will you be doing this as your only income, or will you be keeping another job until the landscaping takes off? That will play a big role in how to use those funds.
  8. Cruz717

    Cruz717 LawnSite Member
    Messages: 17

    Sorry for delay, clean ups have us pretty busy..
    As far as money to pay the household bills.
    What I have planned, and discussed with my current employer, would be a 3 day work week with him, and I would have 4 other days to do my own thing 3 not including sundays.
    I have searched and searched and searched and I am positive my savings will be used to buy all the equiptment needed.
    I undersrand what your saying with using the saving for marketing and such.
    My only concern with that is I have read many post here on this site in regards to staring out with everything on credit.
  9. GreenI.A.

    GreenI.A. LawnSite Silver Member
    Messages: 2,131

    guys will argue back and forth on here about weather to use credit or not. I used it, and grew my company from me being by myself to 17 employees (fulltime, parttime, season) at the peak of the season. I did that in less than 3 seasons. I formed my LLC in 09 and started parttime. Lost my full time job in the fall of 09, so I took my business full time at that point. If I was still trying to do it with 100% cash, I woudn't be as far as I am now.

    The thing is with credit, you have to keep in mind that it is a business tool and should be used as such. If your budget says you can afford a $1,000 a month in payments, then don't take financing that is going to be $1,000 a month. Finance less, so that if you have a bad month, or loose a couple accounts, you can still cover your bills.

    The reason I said I would finance the truck and equipment and save the cash for marketing and stuff is this. Many guys will pay cash for the truck, but then when they want to send out flyers they may not have the extra cash and put it on a credit card. Or worse, they loose the engine in their truck and have to replace it and their only option is to put 5,000 on credit cards. I would much rather pay 3% on a truck note than be paying 14% on a credit card. Obviously everyone is different, I have a low interest card with great perks so I tend to use it more often.

    Heres the simple way I look at it. Say have 10k to spend on a truck. You can get a fairly descent amount of truck for that. But you are going to have to give up things to get a more capable truck. Do you want a newer truck? then you will have to go with a smaller model, higher miles, more dings, less options. With a smaller truck you are going to have much more wear and tear pulling a heavy trailer. Do you want a larger model like a 3/4 or 1 ton, then to stay in your budget you will be looking at higher miles, older year, etc. With older models and more mileage you are going to be at higher maintenance costs. Are you going to need to replace the suspension in 6 months? Maybe the suspension seems fine, but with 100k miles on the truck there is more of a chance of some moderate wear that is going to cut into tire life.

    Now say instead of searching for the perfect truck that is 10k, you get a loan and decide to spend in the range of 12-15k to get a larger truck that will take the abuse and is in better condition, with less expectation of future maintenance costs.

    I'll use the example of a 15,000 loan. If you get a 5% loan for 4 years, you will pay a total of 1,581 in interest over the life of the loan. Thats averages out to $33 a month you will pay in interest. If you can afford to throw an extra $100 in the payment each month you will save $385 in interest, and have it paid off in only 37 months.

    Some guys would throw their cash down and pay the 15k up front and save the interest. I would rather pay that extra $33 a month to keep my money in my account. I could spend 10k elsewhere for company overhead, and save 5k in the bank for an emergency. That 5k would cover 14months of loan payments, if I got injured and couldn't bring in revenue.

    Where guys go wrong with credit is they assume they will always have the revenue coming in. So for the example I just gave. They take that 15k loan for the truck with a $345 a month payment, but don't put anything away to cover it, because "I could afford $350 this month and I'll definitely grow more next year". But then they have a bad winter with no snow, or business doesn't grow next year, maybe they loose sales. But they were so confident, they didn't keep any of that cash in the bank for emergencies. They miss some payments, there great 5% interest rate now shot up to 14% and they have other finance fees for non/late payments. They know they can't work without the truck, so they have to find the money elsewhere to cover the truck bill. Maybe they miss some credit card payments so they can get the truck back on tract. But now they are paying more fees on the credit cards. This because a vicious cycle of robbing Peter to pay Paul until business picks up and they can get back ahead of everything.

    Like I said, we utilize credit when it is benefitial to us, 2% loan on a 35k truck, 5% interest credit line when the vendor gives us 15% discount for buying in bulk. But I also know that I could go a minimum of 2 months with out any revenue and would be able to draw of our capitol to cover every bill we have and all overhead. If I needed to go longer than 2 months without revenue, I could then do layoffs and cut certain expenses, which would allow me to still be able to cover our monthly bills. By the time my capitol gets low enough that we couldn't afford our bills, I would have had enough time to liquidate enough assets to secure more funds.

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