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First step to legitimacy


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  #1  
Old 09-27-2010, 08:06 PM
Hedgemaster Hedgemaster is offline
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Default First step to legitimacy

I just attended a Small Business Basics Workshop.

It cost $45 for 4 hours of info ranging from fictitious names, to the importance of business plans for getting bank loans, to tax info, and more. Enough info to make your head spin, but they also offer free personal counseling service which I signed up for.

I had a pretty good grasp on much of what was presented, but I'm still confused on what order I need to do things in. (naming, tax ID #, insurance, etc.)

Unfortunately, it seems there are no direct answers to some of my questions other than "talk to an accountant", and "talk to an attorney." Sigh. I guess there's no getting around that.

The attorney that spoke mentioned that her firm has a fee of $800 (plus fees for misc. items such as LLC formation) to set up a new business. They submit ALL paperwork for you. I don't know if that's worthwhile, or even if it's anywhere near average as far as cost is concerned, but I think I'll do this myself. That said, I think I'll need an accountant and/or attorney - or at least meet with them at a minimum.

Anyway, wish me luck, as I'm still a bit uneasy about starting a business of this nature at the "end" of the season.
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Old 09-27-2010, 08:33 PM
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I feel your angst. Same boat here. So far, only three calls on properties way too large for my limited equipment. Wanted small yards for time being until the biz pays for bigger/better equipment. So far it's been calls on 1 1/2 acres to 2 1/4. Prices I quoted, having to either use a push 22" or renting a riding mower apparently scared them off.

I'm more interested in leaf removal right now for money and to get the leaves for our garden. But I suspect this is poor time of year to start that too because that biz will probably go to their regular lawn care people or their neighborhood teen.

Maybe we'll both get off on the right foot come spring, though I'll keep trying. I need the money.

Connie
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Old 09-27-2010, 08:51 PM
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check out legal zoom .com I think its 300 maybe a little more to create an LLC. They do everything but sumitt it to a news paper. witch is the last part. then you get all the great business calls and mail because its public info now . Anyways hope that helps.

P.S. I would get the business name asap btw. I was told that most commercial insurance compainies want 3 yrs. maybe that was just crap the guy was saying but thats what i was told.
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Old 09-28-2010, 07:07 PM
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Quote:
I had a pretty good grasp on much of what was presented, but I'm still confused on what order I need to do things in. (naming, tax ID #, insurance, etc.)
My view is keep it simple in the beginning. Who knows if you will like this. Who knows if you will want to continue to do it after you get started so why invest too much until you get your feet wet a little.

Name: If your name is Joe Smith, Why not go with Joe's Lawn Care or Smith Lawn Care. Keep it simple and keep it personal. Play to your strength of being an owner operator and play to your competitor's weakness. Advertise 'Hi I am Joe of Joe Smith's Lawn Care and I will personally make sure the job is done right the first time and you are more than satisfied.' People love to know the owner of the business, so use this to your advantage and let them know you own it.

tax ID #: Why not just start as a sole proprietor. That way, your social security number is your tax ID. You are paying tax on money you make, just have you have been doing all your life. Sure you have to do things a little different from being an employee somewhere, but the difference is pretty slight.

Insurance: It depends on your needs. Just starting out, you don't need too much insurance. Maybe a million dollar liability? Maybe less for residential, depending on how much you have to protect in the way of assets.

Commercial customers may require you to have $2 million dollar liability insurance, but why bother with them early on. Focus on residential customers and focus on bonding with your customers.

Don't know who to buy from? Do a search on here for insurance. There are plenty of posts that will tell you where others buy insurance from.

Let me know if this helps.
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Old 09-29-2010, 10:53 PM
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One more reason to go legit... (actually applies to anyone)

I called a customer to give a price on cutting a jungle of forsythia bushes that have grown to 12'-14' high. She didn't balk at the quoted price, but since I'm not insured, she wanted to wait to have the work done. Fortunately, she told me she isn't going to have someone else do it - that she wants me to have the job, and she's willing to wait a few weeks until I get things in order.

She apologized, but I explained that I understood fully, and that I'd be happy to keep her updated on my progress as I get my business up and running, and reschedule her job for another time.

In addition to that, I've been in contact with a customer in a rather upscale neighborhood who has mentioned my services to some neighbors - they are interested in hiring me, but the lack of insurance is preventing me from a very good opportunity to get some steady work there.
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Old 09-29-2010, 11:23 PM
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Originally Posted by Hedgemaster View Post
One more reason to go legit... (actually applies to anyone)

I called a customer to give a price on cutting a jungle of forsythia bushes that have grown to 12'-14' high. She didn't balk at the quoted price, but since I'm not insured, she wanted to wait to have the work done. Fortunately, she told me she isn't going to have someone else do it - that she wants me to have the job, and she's willing to wait a few weeks until I get things in order.

She apologized, but I explained that I understood fully, and that I'd be happy to keep her updated on my progress as I get my business up and running, and reschedule her job for another time.

In addition to that, I've been in contact with a customer in a rather upscale neighborhood who has mentioned my services to some neighbors - they are interested in hiring me, but the lack of insurance is preventing me from a very good opportunity to get some steady work there.
Ya i lost out on a few jobs as well in the beginning not being insured and guess what now that I am havent been asked lol.... Anyways ya keep it simple. You only need the EIN if you have employees. If you use a guy make sure you just use them in such a way that you can call them contractors.

But ya Keep It Simple Stupid(KISS) always helps.
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Old 09-30-2010, 03:07 AM
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Keep us posted on your process of going legit. You are blazing a path that others would be very interested in knowing what steps you took.
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Old 11-01-2010, 04:58 PM
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Quote:
Originally Posted by Steve View Post
Keep us posted on your process of going legit. You are blazing a path that others would be very interested in knowing what steps you took.
Heh. I don't know about "blazing", considering how long it takes just to get things started, but I did just get my letter from the state today, confirming my entity number for the fictitious name I submitted.

Now I need to advertise my name in two papers (yay, more money I don't have to spend), get insurance (about $400 it seems), send $50 to the state for my Pennsylvania Home Improvement Contractor registration... and THEN I can finally advertise as a legitimate business! Woo-hoo!!!

Oh, and I have to pay approximately $75 (one-time fee) to my municipality to operate a home based business.


I think the only thing "blazing" here is the money leaving my wallet!

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Old 11-02-2010, 06:55 PM
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Oh, and I have to pay approximately $75 (one-time fee) to my municipality to operate a home based business.
WOW! I wonder if they require this for everyone that has a home based business or only for certain types of businesses.

In another post recently we saw how one community wouldn't allow a business license unless you had a place to park your commercial equipment in a garage.

Let us know if you run into any issues with this.
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Old 11-02-2010, 08:39 PM
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Originally Posted by Steve View Post
WOW! I wonder if they require this for everyone that has a home based business or only for certain types of businesses.

In another post recently we saw how one community wouldn't allow a business license unless you had a place to park your commercial equipment in a garage.

Let us know if you run into any issues with this.
Nope - that's for any type of business. Overall, it's one of the more reasonable "fees" I've run into thus far, as it only needs to be paid once.

I saw and posted in that thread. My municipality seems pretty reasonable - I don't foresee any real issues, but if I run into something, I'll let you know.

No work scheduled tomorrow, so I'll be calling for insurance quotes... see if I can beat the $400/1 million general liability coverage that two places quoted me. (one was Allstate - my auto ins. co., the other was an independent agent)
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