How to Start a Lawn Care Business

Everyone wants to work for themselves. Why? Because they see a lot of good benefits. There are both pros and cons of being self-employed which I will discuss below.

Pros of being self-employed

Taxes

When you work for a company you get a W-2 paycheck. You have very little control over what is reported to the IRS. You may be able to write off your computer or a home office, but that’s it.

When you are self-employed, you can write off many more things and have full control of your paycheck and expenses. Every consideration- office supplies, the software you use, the equipment you purchase is within your control. Since everything is a business expense, you can report how much of a salary you receive.

For example, if you produce $100,000 in work, and only spend $20,000 on expenses, the IRS is going to see that you earned $80,000 and tax you accordingly. If you do the same amount of work- $100,000 – and you choose to purchase a new truck, you can tell the IRS you had $70,000 in expenses but only produced $100,000 so profited $30,000. The difference here is that the IRS will take you on the $30,000, not the 80, but you will also have a new truck in your driveway.

The government loves small businesses because they stimulate the economy. We hire employees that pay payroll taxes and in turn purchase more things. We spend a lot more on services than any singular person would contribute more sales tax for the government. That is why the government gives a lot of leeway to small businesses.

Efficiency

Working for someone else, you are usually required to spend about 8 hours at work. How much of this time is productive? For most people, not 100%. You may do some work and goof off or wander around the office. You may work only 4 out of those 8 hours.

Working for yourself, you don’t waste your time. If you work 8 hours, you are being productive those 8 hours, doing things you consider important and not what someone else dictates to you is important. Not to mention, you can combine your work and personal errands to make your life even more efficient.

You can also dictate your hours which is great If you want to start at 7, you start at 7. 8, at 8. No one to ask.

Vacations

For obvious reasons, you don’t have to ask permission to take a vacation. You take it when you want it, as long as you want to. Of course, it also puts full responsibility on yourself to make sure everything gets done and is on pace.

No Boss

This is the big one here. Once you learn how to start a lawn care business, you don’t have someone telling you what to do. Instead, you have hundreds of people (customers) telling you what to do 🙂 The good thing is that you can fire any customer you don’t want to work for and get rid of that boss you don’t like.

Complete Control of Your Career

When you work for yourself, the more you put in has a direct correlation with what you get out. No more working for someone else waiting for them to give you a raise, or not getting paid what you are worth for the amount of effort you put in. Don’t want to work hard? No problem you won’t make much money. Want to work hard? You will do very well for yourself.

Cons of being Self-Employed

Risk

Your job is probably more secure working for someone else. Not entirely true- as you could get laid off- but depending on how aggressive you are with your company, you take a lot more risk than the typical job. This entails both liability to your company’s assets, but also financial risk when the business does not perform you are the first one to miss their paycheck.

Instability

As mentioned above, with risk comes instability. All my employees- and employees working for other companies, know exactly what they are getting paid and when. I, on the other hand, make money inconsistently. Due to the nature of the business, I have virtually no income in the winter, have to invest in the company in the spring and into early summer, and only make money at the end of the year. I have to constantly juggle my cash flow with the company’s cash flow.

Health Insurance/401k

Adding to the instability, in the beginning, you may have to go without benefits as you cannot afford them. Health insurance through an employer is subsidized and more affordable to you. When getting health insurance on your own is very expensive. Additionally, you do not get IRS contributions from your employer, that is up to you.

Difficulty Obtaining Financing

Again, due to the instability associated with a start-up, it may be difficult to obtain financing. The banks can see your instability with cash flow and profit. Banks love to make safe bets, so if they see you as a risk, they are less likely (or will not) to give you a loan. The con to reporting low income (which you are in control of) is that the banks only take what they see from the IRS. This makes financing difficult when trying to buy a house or other times when proof of income is required.

1. Get some experience. If possible, work for someone else during the summer first. This will greatly accelerate your learning and success. No matter how much you read, there is no replacement for practice and experience.

2. Educate yourself. Read this site in its entirety. Ask me questions, read lawnsite.com, join our newsletter, and read the ebook listed on the right, Read read read!

3. Plan your finances. Starting a landscaping company means a lot of equipment purchases. You will also have to pay your help or yourself while you are waiting for your customers to pay you. You will have to either front the cash or borrow money. As long as you have a solid business plan and budget, borrowing money should work for you. I have always been a fan of 0% interest credit cards to get my cash flowing in the spring.

4. File for a business entity. You need to select a business entity, whether that be a DBA (doing business as) or a corporation. I chose an LLC as it provides me with better protection of my assets as well as better tax benefits. This is easily (and cheaply) done through Legal Zoom.

5. Open bank accounts. You will need your corporate forms to open your bank accounts, including your FEIN (federal ID number). You will need an account set up in your business name to accept checks written to the business (unless you have a DBA). Either way, it will make your books and record-keeping much cleaner and easier in the long run.

6. Obtain insurance. You will need a liability insurance policy to protect your clients in case something were to happen. Don’t worry, it’s not too expensive (about a grand for a year of 1 million dollar liability insurance). You will also need a worker’s comp policy if you have any employees. If you don’t get it in the beginning they will find out and you will have to pay fees.

7. Obtain licenses. Depending on your state, you may need a contractor’s license or a pesticide license if you plan to apply pesticides. Where my business is, we only need a contractor’s license if we modify the structure of a residence. So just doing yard work is not modifying the structure so we have been exempt from having a license.

8. Find equipment. Your equipment is the backbone of your company, so you need good, reliable, commercial equipment to get you by.

9. Advertise. Advertising is how you will get your clients to pay your bills and is an essential part of starting a company. There are many cheaper ways to get started including door hangers and word-of-mouth advertising.