In order to start your business off on the right foot, it's important to take the proper steps into making your lawn care business legal.
When your law care business is legal, you have additional securities:
Use this simple 4-step process to make your lawn care business legal now!
The first step into making your lawn care business official lies within giving your new business a name.
As you're brainstorming potential business names, remember to pick something which is:
Then, search for a list of your favorite names in your state’s business name search database. Though, keep in mind, while most states offer online name searches, some ask for mail-in submissions or in-person visits.
Choose a name that is unique to your business, but also conveys the benefits of your lawn care services. For example: “Better Lawns by John.”
In order to begin legally hiring lawn care employees, you'll need an EIN (i.e. Employee Identification Number) in the United States or an SIN (i.e. Social Insurance Number) in Canada.
Fortunately, the process for obtaining either of these is simple.
As a registered LLC (i.e. Limited Liability Company) business, the business owner is legally considered a separate member of your business.
For this reason, many business owners choose to turn their sole proprietorships to LLC status to protect their personal assets from a lawsuits.
The IRS, as well as your state and county tax collectors, are very good at getting the money you owe them.
Which means, it's important to make sure you incorporate your lawn care business under the right tax entity, so you know how much you need to pay the government.
Now, let's do a quick breakdown between S Corp (i.e. S Corporation) and LLC (i.e. Limited Liability Company):
For tax reasons, the IRS classifies businesses as sole proprietorships, partnerships, C corporations, or S corporations.
Although, since there’s not an LLC classification, LLCs are taxed as another business type.
Due to this, if your lawn care business is a sole proprietorship LLC, you’ll need to pay self-employment taxes (e.g. social security and Medicaid).
In other words, your lawn care business' ENTIRE PROFIT for a particular year is taxed. Which means, to save money on taxes, you'll want to consider registering as an S Corp.
If you’re an LLC with an S Corp, you, as the owner, will be paid a salary.
Thus, your salary gets taxed for social security and Medicaid - rather than your business’ total profit being taxed.
AS ALWAYS, meet with a CPA (i.e. Certified Public Accountant) before making any final decisions. After all, a great CPA can address your business' specific needs to help you make the most informed decisions.
Remember, since any major financial decisions have the power to make or break the business, you can't afford to skip this vital step.
Depending on the services you plan to offer, it's essential to get the right applicator licenses, certifications, and business licenses.
For example, if you plan on offering weed and pest control services, you'll need to be certified or licensed by your state. Although, the rules in Canada are a bit different than those in the United States.
In the US, the EPA ensures your compliance to verify safe and effective applications are being rendered.
According to US federal law, anyone who applies or supervises the use of RUPs (i.e. Restricted Use Pesticides) must be certified with EPA regulations, state, territorial, and tribal laws.
Your local government may require you to have a business license as well as a contractor’s number.
Check with your county clerk’s office and the cities you’ll be serving. They’ll let you know whether you need a contractor and/or business license to work in those areas.
Also, keep in mind, NALP (i.e. National Association of Landscape Professionals) allows you and your team to expand your knowledge and service options.
They offer 7 different certifications, including these 3 lawn care courses:
Before you step out of your truck to service your client's lawn, you need to obtain the right insurance to mitigate legal risks.
There are 3 policies you should consider carrying for your lawn care business:
Remember, your equipment is an investment into your business. As a lawn care business owner, it's important to safeguard the heart of your business.
When an inevitable tragedy happens in your business, property insurance ensures your investment won’t be lost.
Also, take a look at a few other insurance policies to consider carrying:
As always, meet with your trusted insurance agent to weigh your business' budget and needs to determine which policies and coverages to include in your account.
Manage your clients and employees all in one system
Even with all of the proper steps and precautions taken, meeting with a CPA is an essential step in making your lawn care business legal.
Also, keep in mind, if you end up needing financial assistance, the SBA (i.e. Small Business Administration) can help you secure a loan. An excellent CPA can walk you through this process.
When you're first getting started, it's easy to get carried away and want to skip over some essential steps in building a legal lawn care business.
However, when you follow these easy steps, you can safeguard your personal and business assets while also ensuring the success and protection of your business.
Use these 4 simple steps today to make your lawn care business legal and official!
Originally publishedMay 28, 2019 7:00 AM, updated Dec 27, 2021 3:25 PM
Tags: Business Operation