New guy needs to get legal and insured

[Thatguy682]

I'm new to this forum as a poster anyway, I've been lurking a few months just reading through some of the information on this sight.

My question is probably much simpler than the answer. What do I need to legally run my business? I know I need a business license, I know I don't need insurance but I want it, and I don't know what I need for taxes. The business license I think I can take care of fairly easily, it's a simple form, a trip to the clerks’ office, and a $35 filling fee as far as I know. To get insurance what do I need? Just a business license or will I need more? As far as taxes go I'm lost but don't want to hire an accountant, will they give me a tax ID number with my license? From their can I use a program like QuickBooks to handle everything for me?




Irrelevant background information about myself:

I have several years of experience in lawn care and plowing working for others and would like to start my own business. I think this is the perfect time in my life to do this. I'm still in college right now so I don't have the financial responsibility of an apartment or house and my schedule would allow me to run a business and still be a full time student. In addition should my business flop I still have guaranteed work. So I figure I probably have a lot less to risk now than later in doing this. I have been doing a lot of thinking about what I need to make this happen and think I have it pretty well planned out.

I actually own most of the equipment I need besides a trailer but have set aside $1,000 for Misc. anyway when I did my numbers (which I must have went over 100 times already). I have 2 big walk behind blowers, a 36in Bobcat, a Redmax 8000, and two string trimmers SRM 2700 (something like that, can’t remember the numbers but they're two different ones). I have all this stuff for my own house because I've just stumbled into it and never got around to the getting rid of it part.

I saw the two walk behind blowers in the garbage and went to the door to ask if they were throwing them out before taking them. The guy was a landscaper and asked me if I wanted his broken Bobcat 36 which was destined for the scap heap as well. The only real reason I took this stuff at the time was because I like fixing equipment like this and figured I could do something I enjoy, sell it and make a couple bucks. I ended up rebuilding all the motors, new tires and belts all around, then I cleaned everything up and painted it. The weed eaters came from a garage sale and aren’t in the best of shape but they work and I have a backup so that's ok and the red max I bought new for my own house. I know it would be a good idea to have a backup mower but seeing as how it's freshly rebuilt I think it's pretty reliable.

I know it's too late to get into lawns this year but I would like to do residential plowing this winter (yes, been to plow site already) and already have a Jeep setup with a plow I want to use. I also think plowing would be a good way for me to find prospective lawn customers.


To anyone that can point me in the right direction or just took the time to read my thread thank you.

 

[LB1234]

speak to both an accountant and an attorney. No one can really answer tax related question/s b/c we don't know what type of business entity you have. AND, we can't tell you what is best for you either. Sole proprietors (sp?) can use there SS#'s. While LLCs, LLPs, C-corps, Corps, Incs use id #'s. I did everything right from my office. Online setup for jersey. Called IRS over phone and received FEIN (Federal Employee ID#)..everything was confirmed and mailed to my house (office).

Yes, you can use quickbooks and go out and get turbo tax and link the two...however...I know you don't WANT to pay an accountant, but you really should...heck you already admitted you are lost. How the heck are you going to do simple things like depreciate your equipment...or what depreciation is best for you...or your computer/printer/fax has a different useful life (according to uncle sam) and gets depreciated different from equipment, trailers, trucks, etc. Are you going to keep up with tax changes from year to year?

I dunno, last year it cost me 450 for my accountant to submit my taxes. I'm not going to tell you how much money it saved me. Also, I called him up whenever I want with questions w/quickbooks and he always has the answer. If you give yourself a fair hourly wage and time yourself doing taxes I'm sure you'll find out its not all that much more. Also, I have piece of mind if/when I get audited I can tell uncle same to meet me at my accountants office. No showing up at my house to take a look around.

 

[Thatguy682]

I'm going to go for a sole proprietorship, the liability that comes with that is one of the big reasons I want insurance. I'm trying to avoid hireing an attorney right now and don't think I need one since I can't really think of any legal matters I need help with. Later down the road if I'm doing well enough that I think I'm going to stay in buisness for the long haul and hire employees then I'll get an attorney and form a LLC.

As for an accountent I might have to break down and hire someone seeing as I have no idea how to go about filling, listing buisness expenses, etc.

What I'm trying to figure out right now is what do I need for insurance? I want to be prepared before I call them. I know I need a buisness license, is that it or are they going to ask me for tax information as well?

 

[mikefromny]

if your from long island as it says.. i am too and i am getting legal for my first year coming up.. so if you need something let me know and ill get it for u im getting my llc.consumers affairs.pesticide license. all done now in the off season so come the 06' season ill be set
-mike

 

[Thatguy682]

You're in a differant boat then me with your LLC so I don't know if you can help me with a buisness license, insurance, and tax stuff. A couple questions though, do you have to charge sales tax? How do you go about that? I'm guessing you have to go somwhere and register then just collect it and send the IRS a check every so often. Could you point me in the right direction on that?
Also how much harder is the LLC to start up than a sole proprietorship?

 

[Thatguy682]

Well I did some hunting around online and after reading through about 60 pages of information the state published I have an idea of what I have to do.


First I have to register to be able to collect sales tax which is the easy part, I'm still not 100% sure on how to do that but it shouldn't be hard to find out.

Then I need to either add the 8 5/8 sales tax to bills and list it seperatly or state that sales tax is included in the price. I'm definatly going for the "Tax Included" option because phychologically I think people are more happy to see the "Tax Included" then "Sales Tax $2.86" even if all I did was tack the tax onto the bill.

Then I need to submit a sales tax return quarterly even if I didn't collect any taxes.

Then their is book-keeping. Lots and lots and lots of book keeping.

Their is a huge section on tax exemption but I'm not working for any schools, churchs, gov't buildings, or anything that would be tax exempt so I can skip that.

 

[mp067]

i am new to this site as well. and i was looking for insurance. however every insurance agent i contacted said they don t write insurance for landscapers and for plowing anymore. i live pa. any help would be appreciated.

 

[Thatguy682]

As for them not wanting to insure you plowing did you tell them lawncare and plowing or just plowing? The way they sounded about plowing they don't like to insure it at all but will do it for the lawncare guys. I think they would have sent me packing if I said just plowing. Give farmers a shot though.
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Well the ball is rolling.


First I got to work on insurance:
Well I called a few insurance companies today and all but one of them heard plowing and ran for the hills.

I wasn't aware their were so many incidents involving plowing that they wouldn't insure it. I can see a little grass ripped up or a belgium block or two but I would think the repairs on somthing like that would be under a couple hundred and would be paid out of pocket rather than going through insurance.

Anyway I called one famers insurance office and they said it would be about $1,000 for one million liability which seems really high I don't know if it's even worth it to do this paying that kind of insurance. They also told me at the end of the call they had just set up with farmers two weeks ago and wern't doing that yet. This guy was one of the nicest insurance agents I've ever talked to though usually they're asshats.
So I called a second farmers insurance place and requested a quote. The women was also nice but wouldn't give me an aproximation she just took down my information and will be getting back to me within ten days.

So if anyone have any recomondations for insurance in NY I'd like to hear them.


Then I got all the paperwork I need to actually form my buisness. That's if you can call one page with about five blank spots paperwork. It says on the bottom notery public and has a place for them to sign. Will their be a notery at the clerks office, will the person taking the form be able to noterize it, or will I have to go to a notery and have it done?



So now I just have to run to the clerks office which shouldn't take more than an hour. Then while I'm waiting for my insurance quotes to come through I can go do the IRS sales tax thing.

 

[LB1234]

No offense but you need to do a little more research. The plowing insurance is not really for backing into someone's car or running over their mailbox...that would be covered under your commercial auto policy...in which you need to make sure they are aware a snow plow will be attached to your truck. The plowing insurance is really for those slip and fall accidents. When aunt millie turns around to sue you for everything and anything you insurance should cover it...minus your deductible of course.

Also, sounds like you are speaking to actual insurance companies NOT insurance agents. Insurance agents don't go packing for the hills, they will find out. One way to not be paying as much is to let them know you don't do any commercial plowing/accounts whatever. For me it would save me a few hundred bucks. Although, that isn't an option for us. If the insurance agent takes down two three items from you chances are they really aren't looking out for the best price...one that is taking info like how long in the business, type of work your doing, places you service, etc...are the ones you want to stick with...they are asking all the questions to get the coverage you need for the best price.

 

[Thatguy682]

No offense but you need to do a little more research. The plowing insurance is not really for backing into someone's car or running over their mailbox...that would be covered under your commercial auto policy...in which you need to make sure they are aware a snow plow will be attached to your truck. The plowing insurance is really for those slip and fall accidents. When aunt millie turns around to sue you for everything and anything you insurance should cover it...minus your deductible of course.

Also, sounds like you are speaking to actual insurance companies NOT insurance agents. Insurance agents don't go packing for the hills, they will find out. One way to not be paying as much is to let them know you don't do any commercial plowing/accounts whatever. For me it would save me a few hundred bucks. Although, that isn't an option for us. If the insurance agent takes down two three items from you chances are they really aren't looking out for the best price...one that is taking info like how long in the business, type of work your doing, places you service, etc...are the ones you want to stick with...they are asking all the questions to get the coverage you need for the best price.

I know the buisness insurance I'm seeking doesn't cover mailboxes, that would be under my regular auto insurance which must be notified as you said.

The reason I want this insurance is exactly what you said it covered. If ten people wants their drive cleared at 7am to go to work then the first person cleared may very well have snow on their drive. If they fall or back into a tree as a result and say it's my fault because that snow should have been cleared that's exactly what I want to be covered for. If a mower throws a rock and puts someone eye out or damages a vehicle, that's what the insurance is for. The buisness insurance can cover property damage as well though. Say my brakes fail and I go through a garage door and total a 300,000 Ferrarri (no shortage of 100k+ cars around here). Then I believe it's my buisness insurance that's going to be footing the bill especially if the damage excedes the limit on my auto insurance policy.

Yes I was speaking to agents. They just said "state farm doesn't offer that type of insurance have a nice day" the same for several other companies I called, these were insurance agents representing the parent companies that told me this.

When I spoke to the Farmers agents they asked me what kind of buisness I had (Sole proprietorship, partnership, coorperation), where I was based, area I was operating, commerical, residential, or roads, when I want the policy to go into effect, how long I've been in buisness, how long I've been doing this type of work, if I was the only employee, and some other questions besides just the basic name, adress, telephone number. What I think may kill me on the rates is my buisness is brand new and I havn't had any insurance before.