Lawn care licensing and insurance questions.

When starting out, should I get a business license? That is a question many new lawn care business owners ponder as they get started. It seems easy enough not to have any licenses or insurance but there are many downsides to going that route as we will see here from this discussion on the Gopher Lawn Care Business Forum. Some of these insights may make you think twice before you choose the path you start with.

One lawn care business owner wrote “if I were to try and get any commercial lawn accounts, do most require the landscaping company to have a business license? Since I started my own business last year, I never got a business license because I was just doing residential clients and most just paid me with cash or check. Plus I wasn’t bringing in that much that would justify getting a license. I know as my business grows, I will need the whole 9 yards with taxes, licenses, insurances, etc.

I figured, if I could land 1 commercial account, I could ask for half the season’s fees up front and that could pay for all the licenses, bigger equipment, a truck, trailer, etc. Right now I am just exploring my options for next year since fall cleanup is just about over and the only thing I have left is snow removal. If and when it snows lol.

I am now 32 and I know I need the licenses, insurances, tax id’s etc. I just don’t know when to get it all. I would guess if I had any commercial accounts, it would require all that but I don’t know. Any help would be appreciated.”

A second lawn care business owner said “it’s the law to be licensed where I live as is insurance, with a minimum of $2 million liability for any commercial work. There is no real reason to not have a registration and license.”

A third added “If you want to start a business and do it right, there are some steps you need to take to make sure you are legit and doing what it takes. The last thing you want to do is come across a really good opportunity and have it taken away because you didn’t follow a few simple rules. I haven’t been in the lawn care business very long at all but I have put things together that have kept me from the serious headaches that could arise later.

  1. Licenses: In my state, you have to have a pesticide license if you are going to spray or lay any type of chemicals. You may want to check in your state to see what the law is. It cost me $55 for the class and materials. But now I don’t have to worry. I also spent 2 days in class, but what is 2 days compared to years in college to make the same amount of money you can make in lawn care.
  2. Liability Insurance: Check with you insurance agent for a quote. Normally it is really low and they can set up payment schedules for you.
  3. Tax Id: This is up to you. But I suggest you call your local IRS office and get a tax id number. Business Checking accounts,etc… will all require this.
  4. Commercial Accounts: If you don’t have the equipment to do larger commercial accounts, then start with the smaller commercial accounts. There are many areas and business that are smaller but pay well and you can do their lawns with the equipment you have. However, you do not want to spend all day on an account four days a month and only make $300.00 a month.
  5. Financing Equipment: NEVER finance anything unless you can justify the payment with accounts you already have. Purchased used equipment if you can.

The key to success in this business is to get off you duff, and get out there and sell your services. Don’t be afraid to knock on doors.”

A fourth shared ” I haven’t had one company ask for my license, however they almost all have asked for my insurance certificate. In order to get liability insurance you will need to talk to an insurance agent to see what they need for you to get liability insurance. Most commercial customers require at least $1 million in liability insurance coverage. My liability insurance runs roughly $1,500.00 per year. I have 2 million liability plus my equipment is covered in case of theft so mine is a little higher.

As far as commercial accounts go, I doubt seriously if you will find a commercial account that will pay you half the years fees up front. If you do let me know.

A Federal Tax ID number may be required by your commercial accounts as some will want you to fill out a W-9 form. It doesn’t cost you anything to get a federal tax id number. Banks will not open a business checking account unless you have a fed id number as well.

So these are some things to consider.”

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