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View Full Version : Being a legit company


xandrew245x
07-30-2012, 07:50 AM
Heys guys, I want to get my business off on the right foot and be a legit company. I have some good questions I hope you guys can answer.

First off I was going to go straight for an LLC, but I read you should just start with a sole proprietorship. From what I understand you would have to go to all the cities you plan on working in and register your name, which could be a couple hundred dollars a year when all said and done.

With an LLC from what I understand you pay a fee to become an LLC and that's it(about $300 for me) Is there any certain advantages to a sole proprietorship that it would be worth paying the couple $100 a year? I know with sole Proprietorship you can be sued for everything you have. What would be a better choice?


Second, Licensing. I did a little looking and I think all I need is a business license, I'm not getting into any landscaping other than mulching and installing edging, small stuff like that, so I shouldn't need a contracts license.

Third, Quarterly taxes. With my LLC they will also apply for my tax identification number and everything else needed. My question is, i'm small right now and I don't have much income for my business, since I don't make very much, will my quarterly taxes be a small amount I could easily pay until I can grow my business.

Registering as a LLC, I have 2 other options for my name if my primary one is taken. I already have everything made up as Peck's Lawn Care. I want my llc to be Peck's Lawn Care LLC, so should I just do a doing business as and make it Peck's Lawn Care so I will have that name no matter what?


I really want to start my business the right way, and my goal is to be completely legit by next year.

dpld
07-30-2012, 10:57 AM
if you are just starting out you should just do the sole proprietor that way you will only have to do your taxes yearly and it will give you more flexabillity if you do not make much money.

there is nothing wrong with llc, s-corp or straight up inc. but it all really depends on how much money you make and what services you are performing.
if you are doing construction work your liabillity goes up drasticly but if you are just doing maintenance the risks are minimal.

there are obvious protections from being incorporated but you are cutting grass for a living and outside of yourself or a employee getting injured what would you expect to happen where you lose everything without that protection.

if you have commercial liabillity and commercial auto the only way someone is gonna get everything you own is if it were proven that your actions were the sole cause of said problem fully knowing the consequences and choosing to do so with no regard to said consequences or you had real crappy insurance and the law suit exceeded your coverage.

plus when you get further along in business after a few years you may find that there really is no money in this business and if you have a change in heart it will be harder and more costly to disolve your business if you are incorporated.

i have been in business for 23 years and i am well established as well as i am a llc but if i were starting out today i probably would choose a different career path because the landscape business is not what it used to be.

hourly rates are not much better now then when i started and everything today cost 10 times what it did when i started like machines, insurance, gas and vehicles to name a few and if anything compareing inflation we get less today then when i started.

all you need to do to be a legitimate business is have a registered business name, pay taxes, have the proper insurance, look professional and if you hire employees, pay them on the books.
being incorporated will not make you anymore legitimate and if anything it will make you a slave to the government and it's ever growing complicated tax codes.
plus being a election year and our current admin having a vendetta against corps and businesses in general with his class warfare you might want to hold off on that because according to the libs, if you own a business you must be making millions.

a lawer will suggest to you to incorporate so he can charge you and a accountant will recommend you to incorporate so he too can charge you as well as most accountants charge more money to do your taxes as a corporation then a individual or SP so without even talking to a lawyer or accountant you already know what their answer is gonna be.

lastly, if you are starting a business soley to be your own boss and call the shots and that is your sole driving purpose and you will gladly take not much more money then if you worked for someone just so you can say you are your own boss then anyone with that mindset has bigger issues that they need to work out and no business is gonna solve those problems.

i am not saying that is the case with you, i am just saying in general.
i myself worked for a big company for several years and learned the biz from the bottom up and i went from the bottom of the pay scale to the top level pay scale and i realized i wanted to make more and the only way to do so was taking it to the next level.
to this day i never really cared much about being my own boss because in reality i went from having a boss to having hundreds of bosses by way of customers.

as i said if you are starting out i suggest you go for the easiest and cheapest route that will make you a legitimate business until you actually start making real money and by real money i mean 4 to 5 times what you would make as a high level employee for a big company because you can always incorporate and change things if and when you become more successful.

xandrew245x
07-30-2012, 01:05 PM
Thank you, I really appreciate your insight. I am going into business for myself because lawn care is something I always loved doing. Sure I could go work for a company that already established, but I would much rather build a reputation of high quality work myself. I work for my parents business, so they are pretty lenient with the rules, so me going into business myself isn't to be my own boss.

I don't want to be a millionaire, I just would like to make more than what I make now, and live a comfortable life which i'm sure is possible.

I'm not sure how to go about registering my business and obtaining a tax id. So your saying as a sole proprietor you only have to pay taxes once a year vs quarterly?

xandrew245x
07-30-2012, 01:28 PM
Has anyone used legal zoom to register their business? It can register it as a sole proprietorship and obtain a tax id number for me, pretty much everything I would need. Is this a good way to go?

SECTLANDSCAPING
07-30-2012, 01:58 PM
To be a sole proprietor you just go to the town hall and its like $10-$25. Google getting a tax id. I dont feel like looking for the link. The IRS gives it to you for free.

The tax question was already answered.

A LLC wont protect all your assets like people claim.

You need a HIC license to install mulch or do anything that is permanent. You dont need it for lawn mowing.

In general you really need to get better at finding information for yourself. The majority figure this out on their own.

I havent been in business as long as DPLD but I seen the industry take a turn for the worst in a short time. I chose going the HIC route rather then going into excavation or expanding more crews. In the past you could make a good living just cutting grass or just pressure washing.

dpld
07-30-2012, 02:37 PM
Thank you, I really appreciate your insight. I am going into business for myself because lawn care is something I always loved doing. Sure I could go work for a company that already established, but I would much rather build a reputation of high quality work myself. I work for my parents business, so they are pretty lenient with the rules, so me going into business myself isn't to be my own boss.

I don't want to be a millionaire, I just would like to make more than what I make now, and live a comfortable life which i'm sure is possible.

I'm not sure how to go about registering my business and obtaining a tax id. So your saying as a sole proprietor you only have to pay taxes once a year vs quarterly?

in my state all you have to do is go to the county hall of records and register and while you are there the person who runs that department will not only tell you what you need to do they will show you how to search the registry to make sure no one else is already registered under that name.

my memory is a little foggy but i don't recall it costing anything significant and it might be anywhere from twenty to thirty bucks in my county.
you don't need a tax payer ID as a SP you can use your ss # and you can file quarterly taxes as a SP but if you are not making much money and don't anticipate oweing too much money you can just file your taxes yearly like you currently do.
if you are hireing employees you will need a tax ID# as far as payroll taxes are concerned and if you pay on the books but be forewarned that once you register as a employer and recieve a employer identifacation number you will need to provide proof of workers comp coverage.
so if you are starting out you may want to avoid that for now to prevent yourself from having to incur the added cost because in my state once you have the number the system responds automaticaly by computer and sends out a red flag if there is no workers comp policy on file with the employer ID.
and once that wheel gets put in motion it is a lot of red tape and crap you got to go through to clear that up even if you have no employee's.

in my state i have to charge sales tax and that you can go online to the state web site and register for that and if you are useing your ss# the number will be the same with a couple of digits added to it because i believe it is a 10 digit number off the top of my head without digging through my files.

most of what you need to do is pretty cheap and painless and is not too dificult to deal with but of course that varies from state to state.

xandrew245x
07-30-2012, 04:35 PM
in my state all you have to do is go to the county hall of records and register and while you are there the person who runs that department will not only tell you what you need to do they will show you how to search the registry to make sure no one else is already registered under that name.

my memory is a little foggy but i don't recall it costing anything significant and it might be anywhere from twenty to thirty bucks in my county.
you don't need a tax payer ID as a SP you can use your ss # and you can file quarterly taxes as a SP but if you are not making much money and don't anticipate oweing too much money you can just file your taxes yearly like you currently do.
if you are hireing employees you will need a tax ID# as far as payroll taxes are concerned and if you pay on the books but be forewarned that once you register as a employer and recieve a employer identifacation number you will need to provide proof of workers comp coverage.
so if you are starting out you may want to avoid that for now to prevent yourself from having to incur the added cost because in my state once you have the number the system responds automaticaly by computer and sends out a red flag if there is no workers comp policy on file with the employer ID.
and once that wheel gets put in motion it is a lot of red tape and crap you got to go through to clear that up even if you have no employee's.

in my state i have to charge sales tax and that you can go online to the state web site and register for that and if you are useing your ss# the number will be the same with a couple of digits added to it because i believe it is a 10 digit number off the top of my head without digging through my files.

most of what you need to do is pretty cheap and painless and is not too dificult to deal with but of course that varies from state to state.
Thanks, I'll look into it and see what I can find out. It's sad that this industry has gone downhill, I see a lot of lawn care companies around here that don't even have a name on their truck or trailer.

I will inherit my parents business someday, but that's honestly not what I want to do for the rest of my life, I would rather do something I enjoy.

SECTLANDSCAPING
07-30-2012, 04:47 PM
It's sad that this industry has gone downhill, I see a lot of lawn care companies around here that don't even have a name on their truck or trailer.

These are start ups and part timers. They come and go. These are the people that drive down prices. Then they go out of business or get a good paying job.

wat5150
07-30-2012, 04:57 PM
Just because your name isnt on your truck means your part of the decline???? Well thats just a bunch of stupid bullsh!t! Dont make assumptions based on someone not having a logo or a flashy name on their truck. Thats judgemental and plain ignorant. For all you know that guy with no name or logo on his truck could be as legit as anyone and doing quite well. I know several people in my area that are legit and dont have their name splashed all over and are doing well. Just a stupid comment....Sounds like high school.:mad:

xandrew245x
07-30-2012, 05:39 PM
Just because your name isnt on your truck means your part of the decline???? Well thats just a bunch of stupid bullsh!t! Dont make assumptions based on someone not having a logo or a flashy name on their truck. Thats judgemental and plain ignorant. For all you know that guy with no name or logo on his truck could be as legit as anyone and doing quite well. I know several people in my area that are legit and dont have their name splashed all over and are doing well. Just a stupid comment....Sounds like high school.:mad:

Actually wat, my two comments had nothing to do with each other, maybe I should have made it more clear. I was saying its sad that the industry is declining. Then that was the end of that statement. Then I was just making a general statement that I see a lot of companies around here without any kind of logo or name on their vehicles or trailers, if I was them I would take advantage of prime advertising space. Sorry for the confusion.

wat5150
07-30-2012, 06:08 PM
It's sad that this industry has gone downhill, I see a lot of lawn care companies around here that don't even have a name on their truck or trailer.

.[/QUOTE]

Seems like one sentence to me.

xandrew245x
07-30-2012, 06:15 PM
I know it does, but thats honestly not how I meant it at all.

xandrew245x
07-30-2012, 06:27 PM
Well anyways, I'm sorry didn't mean to cause any hard feelings.

dpld
07-30-2012, 06:27 PM
Thanks, I'll look into it and see what I can find out. It's sad that this industry has gone downhill, I see a lot of lawn care companies around here that don't even have a name on their truck or trailer.

I will inherit my parents business someday, but that's honestly not what I want to do for the rest of my life, I would rather do something I enjoy.


why is that? is your parents business doing good? the bottom line in life is making money and no matter what you do in life it is gonna get old.
you like doing lawns probably because it is something different but it will get old too.

a business, career or a job is just a means to make money so you can afford to do the things in life you really enjoy.

it's funny how the grass always looks greener from the other side of the fence, no pun intended.

WorkForMySelf
07-30-2012, 06:30 PM
I used legalzoom. I started a few months ago and am set as a LLC.
In the unlikely event of serious injury, the LLC is a firewall to keep you from being personally sued by an employee.
LLC's pay less taxes. I only pay myself the minimum I need to survive and leave the rest in the company account to let it grow. If you are a sole proprietor, expect to pay close to 30% taxes on everything. I expect to pay something like 5% on whats left with the company. Unless you are a weekend guy then get a LLC. If you are a weekend guy then work for cash. You dont even have to have a license at all to perform lawncare in my county/ state in the business is your name ie "John Doe Landscape"

dpld
07-30-2012, 06:36 PM
These are start ups and part timers. They come and go. These are the people that drive down prices. Then they go out of business or get a good paying job.

yes, but whether they succeed or fail there will always be many more to take their place, it is a vicious cycle but even if only 1 out of ten succeed after a while it just adds one more business to a already flooded industry.

when i started out we had about 70 companies in my county and i always said there is plenty of work for all of us.
now 23 years later there is about 1,200 legit companies and that don't even include the untold hundreds of no names.

boy did i change my tune and i am thankfull i got into when i did because if i were starting out today i would not even come close to what i got now and i am sure i will eventually have my fill and call it quits to find greener pastures.

Hedgemaster
07-30-2012, 06:39 PM
The man whose name cannot be pronounced pretty much nailed it all in his first post.

I was freaking out oer these samme issues and when I asked some people in the know, they all said to start as a sole proprietor for the simplicity, AND because it's SIMPLE to change to an LLC later, but to "dissolve" the LLC costs some time and (maybe) money.


You need to check with your state about licensing/registration - it varies.
In PA, there is no "license" for general lawn care.

xandrew245x
07-30-2012, 06:43 PM
why is that? is your parents business doing good? the bottom line in life is making money and no matter what you do in life it is gonna get old.
you like doing lawns probably because it is something different but it will get old too.

a business, career or a job is just a means to make money so you can afford to do the things in life you really enjoy.

it's funny how the grass always looks greener from the other side of the fence, no pun intended.

Their business is doing okay, not one of the best years but its hanging in there. They have been in business for over 50 years, but its just not something i'm interested in doing. I actually enjoy lawncare, but like you said it will probably get old, but who knows until you try.

Hedge, do you need a business license? If not then I don't think i'll need any licensing except for if I do mulch.

Hedgemaster
07-30-2012, 07:23 PM
Not that I'm aware of.

I did need to apply for and be approved (and pay a one time fee) for a home occupancy permit from my local municipality. (In order to operate a business from my home)

Getting everything squared away is the worst part. Any time you ask a question the reply is "consult you attorney", or "ask your accountant".
Yeah, that's great if you have such people available, but I didn't have money to buy lunch when I started, so "an attorney" wasn't an option.

xandrew245x
07-31-2012, 06:01 AM
Not that I'm aware of.

I did need to apply for and be approved (and pay a one time fee) for a home occupancy permit from my local municipality. (In order to operate a business from my home)

Getting everything squared away is the worst part. Any time you ask a question the reply is "consult you attorney", or "ask your accountant".
Yeah, that's great if you have such people available, but I didn't have money to buy lunch when I started, so "an attorney" wasn't an option.

Yeah, I will need an occupancy permit, i'm sure of that. That is really easy to get though. I think I'm going to call my moms accountant, i'm sure she would answer questions for me for free.

dpld
07-31-2012, 08:11 AM
I used legalzoom. I started a few months ago and am set as a LLC.
In the unlikely event of serious injury, the LLC is a firewall to keep you from being personally sued by an employee.
LLC's pay less taxes. I only pay myself the minimum I need to survive and leave the rest in the company account to let it grow. If you are a sole proprietor, expect to pay close to 30% taxes on everything. I expect to pay something like 5% on whats left with the company. Unless you are a weekend guy then get a LLC. If you are a weekend guy then work for cash. You dont even have to have a license at all to perform lawncare in my county/ state in the business is your name ie "John Doe Landscape"


i don't know what state you live in but a sole proprietor is the lowest tax rate you can have and it is the same as a individual.

as far as 30% is concerned that is gonna be closer to what you will pay come tax time if you turn a profit or have any money sitting in your account.

as far as protections go, as long as you have the proper insurance and as far as employee's go workers comp you pretty much have nothing to worry about other then if you were found to be at fault.

for example if your guy loses a eye string strimming and you did not supply the proper PPE ( personel protection equipment ) and had the sheild removed that could be a issue that could cost you.
or if you disconected the saftey shutoffs on your mowers and your worker slipped and it ran him over and seriously injured him you will go belly up.
but, if your worker got injured by the mower and all saftey mechanisms were in place as well as he was wearing the required PPE's then that would be a workers comp case.

the main protections a business owner would have as a corporation is they can not go after your personal assets in the event that your actions or neglect were the cause of someones injury.
but that is what we have insurance for and unfortunately too many people start businesses without insurance and some think that by incorporating they can buy time to get insurance.
i am not saying that is the case with you i am just speaking generally and if you don't have insurance being a corporation or even god all mighty is not going to help you.

xandrew245x
07-31-2012, 11:34 AM
i don't know what state you live in but a sole proprietor is the lowest tax rate you can have and it is the same as a individual.

as far as 30% is concerned that is gonna be closer to what you will pay come tax time if you turn a profit or have any money sitting in your account.


.

Isn't this why most business spend money at the end of the year? I know my parents always spend a good bit of money at the end of the year.