s#!t scared of the great unknown....

Discussion in 'Business Operations' started by rywnygc, Nov 16, 2011.

  1. rywnygc

    rywnygc LawnSite Senior Member
    Messages: 523

    So here's the thing, I need to expand and I don't know how to go about it.

    I am at the end of my second year on my own. My business has taken off a lot quicker than I thought it would...Thank GOD! I am at the point now though, that I have to bring on at least one guy.

    This year I have had my Father in law working with me on bigger jobs, but he has made it clear, that he doesn't want to continue doing this. My original plan involved my best friend moving up here to help me, but I don't think that is going to happen.

    I love this work and I want to make my business a success. I already have almost 40k in landscape work scheduled for the coming spring. Not to mention, the maintenance and snow work.

    I'm scared of bringing on employees. I'm worried about putting a guy or two on payroll and end up having them quit, be unreliable or worse, trying to steal customers to do their own thing. Heck, I don't even know how to put people on payroll. I used to think that I would just stay solo, but I think that you can only reach a certain point of growth without additional hands.

    So, if I want to bring on additional help, what would be the best course? Do I straight up hire someone, try to partner up with somebody, or bring someone on as a subcontractor?

    I'm really starting to feel the growing pains. I hope that someone that went through this can help with some advice, because right now, I don't have a friggin clue what to do.
  2. Glenn Lawn Care

    Glenn Lawn Care LawnSite Silver Member
    Messages: 2,645

    Do not go into a partnership! Ask you account about payroll, they will be able to help you with that. Have you employees sign a non-compete form if you are worried about them taking work from you... or just make it clear from the get go.
  3. Exact Rototilling

    Exact Rototilling LawnSite Fanatic
    Messages: 5,378

    Once you hire a legitimate employee your cost of operation goes up.

    So with that said...in anticipation of hiring someone next year I'm raising my.mowing rates to help offset workman's comp, paper.work.hassles etc.

    If that doesn't fly I don't see much future in this unless it is strictly a family run business.
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  4. thunderthud

    thunderthud LawnSite Member
    Messages: 127

    1. If you do not have a lawyer, get one. You are asking questions of liability and protecting what you have. A bunch of people on the internet is a good sounding board, it is not a source of reliable legal information. Find one who you like and can speak with comfortably. Don't just hire Uncle Frank's bar room buddy with a law ticket.

    2. If you do not have an accountant, get one. This person knows how to save you money, pay your taxes, and not make business mistakes. Listen to this person. You should not need to see your accountant more than twice a year, and never at tax time. If you aren't planning for next year, this year you're way behind. I see our accountant in November and June. We go over the past, and he asks about the future.

    3. You do not need a partner. This person will probably be a pain in your ass, or you might get lucky and find someone who will fill the parts of the business that you either suck at or aren't very good at.

    4. An employee is a responsibility. Treat him or her as such. It is hard to get a good employee, it is even harder to keep a great employee. As the saying goes, you need to kiss a lot of frogs before you find your prince.

    5. If you do not have a plan in place for growth, you need to stop and make one before you go any further; see items 1 and 2. The difference between a company that is growing and a company that might not grow is a plan. My longtime boss told me "Marines don't take a **** without a plan, son, always have one." Before I do a job, I know where every last bucket of material is going, and where every last scrap of detritus is going to end up. I was never a Marine, but I always take the time to make a plan. Have a plan for the expected and a plan for the unexpected.

    6. Always have an exit strategy. When you're in business, the smartest people always have the way out. In a heartbeat we would sell this company for the right offer. There is a plan in place should that happen. We also have a plan to sustain just what we have as well. I have almost 60 people, they work 12 months a year, we have an obligation to them and their families. I can send them back to the hall, but have a plan to keep everyone on the payroll if we never acquired another property or built another building. I can sustain this indefinitely.

    I have said this in many other posts: get a lawyer and get an accountant you can talk to and feel comfortable. Good luck!
  5. rywnygc

    rywnygc LawnSite Senior Member
    Messages: 523

    I am trying to get a good lawyer now. I have an accountant. I plan on calling him tomorrow to talk about adding employees. I am currently planning for next year.

    I was thinking about going up to my VA Hospital and talking with the OIF/OEF reps. They help combat vets get jobs after coming home. Being a combat vet, I think that hiring other vets (as long as they aren't d-bags) would work out well. I would be able to run my crew like a squad, plus I think there is a tax break for hiring vets....not sure on that though.

    If I hire a guy at 10-12 an hour, how much do I actually end up paying after all the insurance and taxes etc...? I'm guess here, but I figured it would be around 20-22 an hour.

    I'm really not sure what advice I am looking for...if any.? I just have a million things in my head right now, and I figured some of you may have encountered the same thing.
  6. PaperCutter

    PaperCutter LawnSite Bronze Member
    Messages: 1,996

  7. abstontino

    abstontino LawnSite Member
    Messages: 60

    Check with your accountant about hiring someone under "contract" labor. Decide on a hourly rate and that is what they are paid, you don't cut taxes or insurance. At the end of the year that laborer is cut a 1099 for any earnings over $600. If you are looking at operating with only one or two extra people this might be a benefit for you, depending on the amount of labor you would be paying out. Be sure to inform those you intend to hire of your payment method because the taxes are their responsibility when tax time rolls around.
  8. Fvstringpicker

    Fvstringpicker LawnSite Fanatic
    Messages: 7,643

    If you hire "contract" labor they better well be independent (see IRS rules for independent contractors v employee ) The penalty for treating an employee as a contractor is substantial.
  9. Roger

    Roger LawnSite Fanatic
    Messages: 5,933

    The advice above in #7 is only good if you sub-contract work. This is not legal for employees, and as #8 points out, you are in deep trouble when found out (not "if"). Independent contractors are fine for certain instances, but not for day-to-day employee work. From the initial posting, you are not looking for IC, you are looking for employees.
  10. wbw

    wbw LawnSite Fanatic
    Messages: 5,928

    This is virtually impossible to do legally.

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