Starting a small business/how much?

[dmccarty]

Steel_wheels,

I am at home and Hazmat gave you the site I was thinking
about. Lawnsite.com.

Its a good place to do research on the lawn care and
landscaping buisiness. I think you will get a good idea of what
other companies are doing and what you would have to
compete against.

Also you might want to search TBN for similar threads. I think
you will find some other discussions about starting this type
of business.

Hope this helps,
Dan

 

[Anonymous Poster]

Thanks Dan....every bit of information does help....I really appreciate all of the info and ideas everyone has sent me....

Thanks again /forums/images/graemlins/cool.gif

 

[Anonymous Poster]

Steel_Wheels: couple of comments:

1) Several have mentioned a corp structure. Be advised that the mere act of incorporation will not necessarily protect you. There are many factors involved from regular "meetings" with minutes and other issues. And even when you follow the rules, a court may allow penetration of the "corporate shield". Further, some state courts will not recognize your corporation if you are incorporated in another state but actually doing business in their state. If you want to go the corp route, get an attorney, period. Otherwise, set things up for confusion, using a foreign (other state) corp for you biz account, d/b/a for advertising, etc. etc. I won't go into that here, except to say that if you "appear" not to know what you are doing (act innocent), have things structured so your assets are not legally owned by who seems to own them, etc., you will find you have more security.

2) I have always been leary of "partnerships" because of the issue of the true market value contributed by each partner. It is simple human nature for each to believe they are contributing more. When everything is going great it may be less a problem, but it exists. When disagreements come up . . .watch out. Whatever you do BE CERTAIN you have a buy-out agreement. The old Solomonic approach is as good as any, i.e. whenever one party becomes disatisfied a buy-out takes place. One partner (either one) sets the price, and, the other one has the right to buy, or sell, at that price. That way neither party can claim they were screwed-the partner setting the price cannot claim the price was unfair since they set it, and the other party cannot claim the price was unfair, since they have the choice of either buying, or selling at that price.

JEH

 

[Anonymous Poster]

You typed all of that for me ?????? /forums/images/graemlins/shocked.gifThanks a bunch.... /forums/images/graemlins/laugh.gif

 

[Alan L.]

A couple of suggestions: 50-50 businesses can become as locked up as the US Congress at times. Make sure you have at least 51% to control it.

Be careful about "independent contractors". Really the only way they aren't employees is if they do such services for other landscape businesses. If you're it, then they are probably employees, even if they are part-time and/or use their own equipment.

I would feel a little uncomfortable even owning the equipment personally (and leasing it to the corporation). If you hit a rock and it kills someone, the owner of the equipment might have some liability, even if he wasn't operating it.

 

[thcri]

As Alan said and I also said it earlier, 50/50 is not good. 51/49 is very good. I know of too many business's that split because of dead locks. There is no two guys or women that will agree that same all the time. One may be generous and give in, but will only do that for so long.

As far as the Corporation, Attorneys are getting through the Corporation Protection Laws more and more every day. The smaller you are the easier it is for them to get through. Get an Attorney and an Accountant before you do anything. Make sure both of them are respected and know their fields. This is one area where you don't want to be cheap on.

Independent Contractors, Watch out for this. You might think you have a good thing going until you get audited. You may end up having to borrow your life away to pay the fines and penalties or possibly lose your assets. I don't know how other states are, but Minnesota has really gotten tough with it.

Also remember, if you are not paying work comp and one of these so called Independent Contractors gets hurt on a job that your doing, Your the one that is going to get sued. Remember the one with the deepest pockets is the one the will get sued.

I don't want to discourage you but to only prepare you. Business's are getting tougher and tougher every day to make go. People out there are finding more and more reasons to sue, courts tend to favor people with the least money and a business always has more money. Again I can't over emphasis on a good lawyer and an accontant.

Murph

 

[wasabi]

You may find an LLC to be a more flexible and attractive structure...essentially same cost as S-corp. BTW, don't overpay for a company setup...while I use and recommend attorneys and accountants, they can sometimes make more of this than necessary. By all means have a detailed written plan...the discipline required to write it will address many issues. Start simple, prove investment worth, build in incentives and grow toward success!

 

[grandad]

Well, there's a TON of good advice here, particularly about corporations, partnerships, etc. Some others have mentioned incentive and motivation, and they are right... your cousin needs more than wages to make the venture thrive. Even if he is a good worker... in fact, because he is one, he needs a stake in its future.

More things to think about... (there are probably at least a million!)
- Can you and he get along together day to day?
- Know anything about others who've either made it or gone belly up doing the same thing in the area?
- Many small businesses fail because they run out of cash before the business really gets up to speed. It can take quite a while to build up a client base. When (not if) there's a dry spell, are you prepared to keep him afloat?
- Does he really want to do this?
Think this through really well before taking the plunge. And good luck... you sound like a good person to have as a cousin.