How to Start a Lawn Care Business Legally
Legal requirements for starting a lawn care business
Comprehending Local Regulations and Zoning Laws
Navigating State-specific Legal Frameworks
Labor laws can also apply when hiring employees. Before you begin, it could be worth talking to someone who knows the legal frameworks for guidance. It may save you a lot of grief down the road.
Choosing the Proper Business structure for your lawn care business
You need to select the proper business structure for your lawn care business. It really depends on what you intend to do with the business. The structure of your business will affect things such as liability protection, taxation, and administration requirements.
Exploring Sole Proprietorship vs. LLC vs. Corporation
How to start a lawn care business legally starts with your structure. A sole proprietorship is the most simple and common structure for lawn care businesses. However, it leaves the owner personally liable for business debts or legal obligations. We have this kind of structure for our lawn care business as we mow lawns, so there is little that can go wrong. However, we carry a million dollars of liability cover just in case. If you were looking at a business where you did something like hard landscaping, then you may want to consider a Limited Liability Company.
A Limited Liability Company can shield you against personal liability. It can also protect your assets in case of lawsuits or other financial issues.
This site will take you through the setup process for an LLC in your state. How to start an LLC.
Registering your lawn care business
The first step in registering your lawn care services business is to develop a business name. The name needs to be available for registration. A good way of doing this is to open a domain name search while you do this. If the .com domain is available, then there is a good chance the name is available. I have an article here on naming your business. Unique Lawn Care Name Ideas in 3 Easy Steps
Once you have a name, register it with the appropriate authorities. These could be the secretary of state or the county clerk’s office.
Steps to Officially Establishing Your Business Entity
Now that you have a name and a business structure, you must register your business with the IRS for tax purposes. To register with the IRS, you must obtain an Employer Identification Number (EIN). This number is used to do things like file tax returns, pay employment taxes, and open a business bank account. It is much like a business version of a Social Security Number.
The next step is to open a business bank account to separate your business finances from your personal accounts. Only use your business account for purchases and income related to your business and pay yourself once a week. Do not make the mistake of using it as a personal ATM. That will get you into trouble down the line.
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Obtaining necessary licenses, permits, and certifications.
Now that you have registered your business, you must consider what licenses and permits you will need. These are the most common ones.
Identifying Required Licenses for Lawn Care Operations
The usual licenses, permits, and certifications required for a lawn care and landscaping business are as follows.
- Business License: Most cities or counties require a general business license to operate any type of business, including lawn care, legally.
- DBA Registration (Doing Business As): If you’re operating under a name different from yours, you may need to register your DBA name with the local government.
- Contractor’s License: Depending on the scope of your lawn care services and the state you operate in, you might need a contractor’s license, especially for more extensive landscaping projects.
- Pesticide Application License: If your lawn care service includes the application of pesticides or herbicides, you’re likely required to have a pesticide applicator’s license, which involves passing an exam that covers proper application techniques and safety measures.
- Environmental Permits: Depending on the nature of your services, you may need ecological permits, especially if your work impacts water runoff or involves significant alterations to the landscape.
- Vehicle Registration and Commercial Driver’s License (CDL): If your business transports equipment using large vehicles or trailers, you may need a CDL and proper commercial vehicle registration.
- Workers’ Compensation Insurance: If you have employees, most states require you to carry workers’ compensation insurance.
- Zoning and Land Use Permits: If you operate out of a physical location other than a traditional office space or store large equipment, you might need to comply with local zoning laws and obtain the necessary permits.
- Professional Certifications: While not always legally required, obtaining professional certifications (e.g., from the National Association of Landscape Professionals) can enhance your credibility and expertise.
Acquiring Permits for Equipment and Chemical Usage
How to start a lawn care business legally is not the same in all locations. Some locations, permits may be required to show that you have been trained to use lawn care equipment such as lawnmowers, trimmers, and leaf blowers.
You will also require permits to cover things like applying pesticides, fertilizers, etc., for chemical lawn treatments. These permits usually involve training in handling, storage, and disposal of chemicals.
Visit the website of your state’s Department of Agriculture or regulatory agency responsible for pesticide regulation to understand the specific requirements for obtaining a Pesticide Applicator License.
Insurance for your lawn care business
When you start your lawn care business, you must ensure you are covered. This will protect you and your business assets as your business grows. Unforeseen things can happen; if you are not prepared, it can spell the end for your mowing business.
When I had my first business back in the eighties, I had a friend who had a business white-walling car tires on car sales yards (it was the eighties, remember?). He jacked up a car at the back of a sloped uphill car yard. The car rolled off the jack and down the yard, hitting classic cars all the way down. The bill was over 100K, and he went bankrupt. I went out the next day, bought public liability insurance, and have had it ever since.
Don’t be like him.
Types of Insurance Coverage Essential for Lawn Care Businesses
When you operate a lawn care business, you must have some insurance.
General Liability: this is a must as it will cover you for things like property damage, bodily injury, and other incidents that can occur while services are provided.
Commercial auto insurance: This covers damage, theft, and accidents. Ensure this policy covers your tools as well, as you will be hauling your gear around with you most of the time.
Professional liability insurance: If you give paid advice. This will guard against claims of negligence or misrepresentation.
Worker’s compensation insurance: If you have employees, this may be required in your state. It will cover you for medical expenses, lost wages, etc. if you have work-related injuries or illnesses.
You may need other insurance not mentioned here due to the specific nature of your business.
Get Good Advice
Find an insurance professional who understands the lawn care industry and get some advice. It is worth paying upfront to assess your true risk profile rather than discovering that you are not covered when something happens later.
I once watched a tree company drop a tree onto a glasshouse while I was mowing a lawn looking down on the property. One would hope that they carried the right kind of insurance.
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Understanding Employment Laws for Hiring Workers
As your lawn mowing business grows, you may need to employ workers, as we have several times. This brings in many more regulations, including anti-discrimination, background checks, immigration laws, and the employment of minors.
I will not go through everything here as I aim to keep this under 100,000 words (2000, in fact). However, these are links to the places you will need to become familiar with.
- Fair Labor Standards Act (FLSA)
- The Americans with Disabilities Act (ADA)
- Equal Employment Opportunity Commission (EEOC)
Ignorance of these laws is not a defense in legal disputes, so staying current with them is your job.
Compliance with Labor Laws: Hiring Practices and Employee Rights
How to start a lawn care business legally is about fairness during the hiring process, starting clearly with what a job role involves, the responsibilities, and the necessary qualifications.
Once you have applications, you need not discriminate based on race, color, religion, sex, national origin, age, disability, or genetic information.
It’s also crucial to understand the laws governing the work environment, including harassment policies and the right to a workplace free from discriminatory practices.
Hire carefully and make sure that the process is correct.
Navigating Wage Regulations and Workplace Safety Standards
You must pay at least the federal minimum wage as stated in the Fair Labor Standards Act (FLSA) and a minimum overtime rate not less than time and one-half or regular pay.
Adhere to Occupational Safety and Health Administration (OSHA) guidelines to ensure a safe and healthy environment. This involves having safety protocols in place and providing the necessary training. You will also need to equip workers with the appropriate safety gear.
Intellectual property considerations for your lawn care business
Back in the 80s, when I was a struggling cartoonist, we had something called a poor man’s copyright. It involved posting a copy of a piece of art to yourself and keeping the unopened envelope, thereby using the postage stamp as proof of the art’s existence at a certain date.
It’s a bit more complete these days, but you are still doing the same thing.
Protecting Brand Identity and Trademarks
Intellectual property (IP) is registering your name or logo to protect it from infringement. Simply put, IP stops people from using an existing logo or brand to mislead consumers into thinking they are dealing with the original company.
There are different types of IP protection available. These are things such as trademarks, copyrights, and patents. Here is a link to a simple three-page PDF from the United States Patent and Trademark Office talking about Protecting Intellectual Property in the United States
Tax Obligations and Accounting Practices for Your Lawn Care Business
You have probably heard this before, but I will say it anyway. Keep track of your income and expenditure.
Understanding Taxes and Keeping Track of Money in Your Lawn Care Business
Always keep some of your money back for taxes. In our business, we roughly split our turnover into 10% taxes, 40% running costs, and 50% wages. This is to give you an idea and may not work with all businesses.
I can’t tell you exactly what your taxes will be because this changes from time to time and is dependent on your location. However, this page about business taxes from the IRS should contain all the information you need to know to get started. Business Taxes
How to start a lawn care business legally is always to follow the rules regarding taxes. The last thing you want is to be on their radar if you do something wrong.
Using Good Money Management Tools in Your Lawn Care Business
You can also use software like Microsoft Office or Zoho Books. Both of these are affordable options. Electronic First sells legal versions of Microsoft for as little as $20, and Zoho Books is free for the first 50K of turnover.
Learn how a cash flow works and do some projections. I do this all the time. This will let you know ahead of time when you will have funds and help spot your lean periods.
Conclusion and next steps for starting your lawn care business
I hope that the laundry list of requirements doesn’t put you off too much. It’s not too difficult once you get your head around it. Just remember, people just like you are starting lawn care businesses every day, so it’s not impossible.
Summary: How to Start a Lawn Care Business Legally
When you start your lawn care business, you need to get it right. Find out your legal requirements and what permits, certifications, and licenses you need to comply with local, state, and federal regulations. You must also consider local zoning laws, business registration, taxation, and environmental regulations.
Look at the different business structures available and choose the one that suits your business needs best. Make sure that you have insurance to protect you against the unexpected.
If you are going to employ people, pay attention to employment laws, wage regulations, and workplace safety. Use software to keep track of your incoming and outgoing so you know where you stand when tax time rolls around.
Now, get out there and build your very own successful lawn care business. I did it, and you can, too.
Frequently asked questions.
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