start up advice

W

wilson

I would like some advise or input. I am thinking of getting a business licens and insurance. I currently have a full time position for a local govermant as a forman on there tree crew. With this job I can do a fair amount of side work/ buzzy jobs/ cash jobs whatever you prefer to call it. I am going to continue to be employed full time but I would like to go lagitimate with my side work.I take alot of pride in my work and I offer a quality service. I dont want to be called or lumped as one of those pick up gypsi hack and wack and you never see them again. My thoughts were to get a sole propriatorship licens and insurances. Its only a weekend and eavnings gig and I wont have employes. I am a ISA CA for what its worth. My questions are is it as simple as just getting the 75$ licens and ????$ insurance and Im set? Do you think Im going about this the right way? Is this the proffesional thing to do? Is ther any one else that relates to my situation and sits on the edge of do I have enough work to go ligit or am I wasting my time?Thanks for any advice or support.

Ps. I am not vary good with computers and I know there is some spelling errors.
 
None of us have spelling error...just typing errors!

You're on the right road. Insurance and local/state licenses will separate you from lots of other tree companies. Be sure to make a point of telling your customers that you are legit. Give them a scare...do they want to be liable for damages/injuries on their property. Insurance is a gamble...is a client willing to gamble a few dollars against a possible law suit?

Don't forget about workers compensation for any employees.

I found an industrial employment agency to run my employees payroll. Officially they were employed by the agency and I was their supervisor. It cost me 30% of their wages to cover all taxes and Workers Comp. Not a bad deal when WC was running at 20%!
 
This is America! That type of ,strike out on your own attitude is what built this ountry!! you go for it and do it right!! You will be fine! just check your local county seat ,the business registration people can help you pretty good!!
 
Dude, I started with $26 and a beat up IBM PS2 mod 25 with a DEC laser printer from a dumpster.

If you have the dream you have the most important part of owning a business. The second most important is a willingness to learn everything you can.

You are demonstrating that right now by ask these questions.

Do everything in your power to earn and obtain your credentials. The sooner the better. Also play by the rules and if that means a certain kind of insurance, figure out how to get it and keep it.

it is a dog eat dog world out there the trick is to not be one of the dogs. Even better, to not even be in the same food chain with them.

Good Luck, and Good Journey!
 
Shop around for insurance, you can find $1-2 million liability insurance for under $1000/year.

You have health insurance from your gov job, right?

Having no employees is nice(no work comp needed), but I assume you will need help at some point or another. Technically your help should have there own liability insurance and business license if you are paying them like sub contractors and writing off what you pay them. This becomes a touchy situation, do what you will.

Get a business debit card and put EVERYTHING you buy that is business related on that card. Makes tax time a piece of cake.

Good luck.
 
I agree with toms post.
You are definately doing the right thing. Insurance also covers you in the event something does happen. I think Toms Idea for payroll would work better for you having paprt time employees and it will be easier for you to figure your costs direct to the job.

rfwoodvt
I have you beat....I started on a radio shack TRS 80
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An accountant to set up books or book keep for you can be money well spent. You may have certain taxes that you are responsible for paying.

Your accounting will be pretty simple, just depends on how much time you will have for it, along with all the rest of things.


I'd read all the business management posts for the last seven years. It doesn't really take that long, just as many at a time as you feel like. TONS of information.

A sole proprietorship will make your personal possessions, such as your house, truck, etc, at risk. Incorporating can be an expense through. A small business lawyer told me a $1000, though some of the things could be done by my bookkeeper cheaper. The bookkeeper told me that her CPA boss could do it for a few hundred. Probably hard to go bankrupt unless you finance a lot of equipment.

You should have some people on an emergency call list that are climbers in your area if you will be working alone, at height. No cost, and hopefully never, ever needed, just legwork.

You may be in a great situation where you have the gear you need, mostly at least, if you are already working on the side. You have a steady paycheck, and maybe health insurance.

Best of luck.
 
To protect your personal belongings, an LLC would be the way to go as a sole proprietor. Here in TN it is $300/year and I traded the attorney who set it up with tree work.
Just a thought.

All you need is a bus license, liabilty ins, keep track of what you spend, find accountant to do taxes (unless you enjoy beating your head againist a wall trying to do it yourself). Becoming an LLC would be an advanced move but in this sue happy world...a secure move.
 
A couple hundred $$$ spent talking with a lawyer to figure out what you are up against would also be money well spent.

I sat with my attorney for about 2 hours just asking questions, especially, "what are the basics I need to know"

Take copious notes, but don't let them write anything for you. At $75a page <u>that</u> gets expensive!

If you use something like quicken or quickbooks to keep track of your business income and expenses tax time can be easier.

We use QB and Turbo Tax and do our own taxes. Keep in mind though that I did go to school (those many years ago) to become an accountant. But I know lots of non-beancounters that successfully do the same.
 
Thanks for all te positive encouragment and advise. My personal delama is still do I do enough business to make it worth Ins and tax? I know if I ever have an issue ins will be money well spent. As well it will alow me to bid and get more jobs. Most importantly to me it will make me more "confidently proffesional" when approching customers. Reading my own words makes me think there is my ansower get the Ins! But again I rember I am only a eavning and weekend gig because I have a 40 hr a week tree job with the local gov. Winters are slow. I do sell fire wood but on a small scale(10 cord a year). That is low risk and cash so I guss I shouldent factor that in. My yearly grose is only 10 to 15 thousand at the high end a year.All my equipment is payed fo. I with hold a precentage of every job I do and put that money back into equipment. I havent purchased any thing I couldent pay for cash in hand.

I fell I am vary financialy responsibal and efficiant at keeping record of in out cash flow. Even though Im not lagit at the moment I keep vary clear records. Call it practic I dont know I am an organization freak.I dont think I will need a book keeper I do have a tax guy.

I have several calls out trying to get Ins quotes but havent heard back on any yet. I think that cost will be a determining factor. Dose any one have a sugestion on how much ins is needed? I know the more the better but there is a ballance of overkill and cost.I really dont know what is ideal.

Im shure im just procastinating and sweating the little things but this little step is a big deal to me.Thanks again for any advise.
 
I've known it to happen that a person gets liability insurance, and is working up to the rest. It might be a good starting point.

If you are at 10-15k now, think about what that means if you start charging market value for insured, licensed, legit work. Do you feel like you have a handle on market value from some of your previous clients? Will the same number of jobs amount to 15-20K, 20-25k, gross revenue?

Someone said that liability insurance isn't so much to protect your customer's assets, but your own. Something to think about.
 
Im actually on board with the outscourcing of accounting! that is one of the first things I did when I started out!! I knew that I would not have ,or take the proper amount of time to do the work.It was and is money well spent!
 
Wow this sounds like me 2 years ago to the T. I work for a local public works and run a side company on the weekends and storm work emergancies if needed during the week. dont really do anything in the winter due to plowing city streets.firewood is just for the family(too much tax stuff to keep track of for me). LLC is the way to go imo, keep your stuff seperate from the company. you might be able to lower the amount of coverage in the winter if you choose not to that much work. one thing to check is that doing any work in the town you work in may be against the rules, it is for me. conflict of intrest is what they tell me, i dont thik it is but then again they are employing me so i do what they ask. Quickbooks is great and well worth the money, its easy and simple. My account is a quickbooks pro and can show me anything on it so it works out well. as for the rest keep a level head and try not to get upset when you loose a job to a big company,just because they are who they are, not because they are cheaper. remember they do it for a living and are trying to feed there families and if you have a steady job, thats just being greedy. stay safe and use all the same saftey procedures as at your regular job and you'll be fine.
 
I'll share my story... But, every path can be different in this industry.

I took an unconventional route to gather a large client base. I didn't invest in equipment for 5 years. But, I paid over 10% of my gross income to advertising. The advertising brought in a lot of business. So, I was able to buy every piece of gear without debt. And put myself into a position to buy a home with land. In return, this land is a place where I can legally conduct business from my home, park trucks &amp; equipment, put in a shop, I dump mulch and wood, you name it, etc...

My point is, I had a strategy. Make a strategy and stick to it!

I've been in business for 8 years now. I've seen tree services come and go. I've see guys get machinery off the starting line, to have no clientele to pay for it.

If I had one good point; Advertise strong, machinery later!

That's just my story... And I'm sticking to it.
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Don't think that splitting firewood isn't risky. On 12/21 I did a stupid thing while splitting and pinched my right hand. The thread is in Awakenings. I'mm still dealing with this. It's all covered by Worker's Comp. I had a second surgery on 3/2 and won't return to work until 4/8 at the earliest. I can't even imagine what this stupid accident has cost so far.
 
Think twice, act once. Go ahead and start your business. I agree with Tom and Jamin'. I have liability insurance obtained right from the get go before I had my first client and it is a big selling feature. I have no big equipment and as such offer my clients a simple service where they basically deal with the material generated or I contract the clean up.

You are starting a business and must approach it as a business person first, a tree guy second. What I mean by that is think about why you want to do this and how you will make it grow and be successful. A business plan is an important piece to create. In producing it you will begin to think about the business issues like licensing, taxes, insurance, advertising, growth strategies, etc....

Really define what your role will be at the beginning, 6 mths., 1 yr, 2 yrs, 5 yrs from now. The plan may be simply to create a great part time business to supplement your income where you will always be the guy doing the work. It may be a business that will eventually become your full time focus meaning you will be managing a full scale operation that replaces your current full time gig. That's up to you.

Oh and learn to use the computer effectively including a spell check/grammar check to help you edit your communications. This way you will come across as a professional in writing as well. Understand that you are often dealing with clients that are professionals; doctors, lawyers, accountants, engineers, with university education. The better you come across in written and oral communications the greater chance you will have of winning these types of clients over.

Good luck!!
 
Most things require at least a $1,000,000 coverage. It's really not that bad. You said that you already had equipment paid for. So really all of that needs ins. And not only is that a plus right there!

It is still early in the season. So you will be able to do good. It was probably May last year one of the companies that I work for just got lagget. I think he paid for the first 6 months, and we probably brought in 3 grand that week. This guy works a reg. 40 job also.

Wilson, "YOU CAN DO IT" It's not that bad. Like I say it is early in the year. And if things change, and next year you decide to you can drop it. Can't hurt to try!
 
Great to hear everyones story. Very positive, most forums you would be told to run the other direction. I'm hoping to get out on my own this season on a small scale and this forum has been very helpful.
 
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