Trying to run a legitimate lawn care business? There are many steps you must take to comply with laws that govern the lawn care industry. From time to time, one thing we see some new lawn care business owners interested in, is becoming ‘bonded.’ Most times new business owners who inquire about about becoming bonded, have seen other, larger companies with the word ‘bonded’ on their marketing material and in their quest to become legitimate, want to emulate what the big boys do. But as we will see from this discussion on the Gopher Lawn Care Business Forum, there are certain steps you may or may not want to take, based on your business size and the type of clients you are servicing.
One lawn care business owner wrote “I took the plunge and registered my lawn care company name and got my business license. But now I’m unsure if I should get bonded or not. Also I am unsure where to get liability insurance. I doubt I will make very much money this year since I am doing this on the side with maybe 5 customers total. What should I do now to be fully legal and operational?”
A second lawn care business owner said “I would suggest that you check with your insurance agent that handles your home owners or your truck policy, they can help you most of the time with a quote for your business insurance. And as far as being bonded, if you’re not gonna grow much more than a handful of residential lawn care clients, then I would not get a bond. I do not think bonding is necessary for such a small lawn care business. Bonding can cover things such as employee theft at a clients’ house or business, but most of the time, this is not something you need to be worried about when you are small.
I believe ‘bonding’ is a word that is thrown around a lot without a clear understanding of what it means.
There are different types of bonds. One type of bond is a surety bond. A surety bond is, basically, a promise of payment by the bonding company to the organization you are under contract to. In other words, if you agree to a lawn maintenance contract for 1 year and then quit after 1 month, your bond agreement may help protect the organization against loss by your quitting. Whether it protects YOU or not depends on other factors such as the verbiage in the bonding agreement.
In my opinion, apart from bonding employees, surety bonding is the most prevalent need for lawn care companies bidding contract work. It placates the organization you are under contract with, which is good. The question you have to ask yourself is do you really need to be bonded when you are just servicing five clients?
Before you throw money after designations such as ‘Bonded’ to your lawn care company, do your research so you know what you are actually buying and if it is needed and will benefit you and your small business. At the end of the day, my opinion is a sole-proprietor mowing 5 neighborhood residential lawns doesn’t have a great need for being bonded. Instead your primary concern, at this point, should be to determine what local license requirements you will need to meet and make sure you secure proper business liability insurance.
If you plan to bid such jobs as mowing military bases, bonding will be an absolute requirement. They won’t let you ‘guess’ whether you need it or not. Also, bonding will be one of a LONG list of other requirements for which they will hold you accountable. Such clients will double, triple, and quadruple check your credentials before your bids are accepted. Sometimes it’s nice not having to wonder if you’re in compliance. Certain clients will be very picky requiring that you have references and that your business is squared away. One thing is for sure with clients like these is that you never want to be the highest or lowest bidder…EVER! Such bidders never land the job.”
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