Wondering how to start a Lawn Care Business legally? We got you!
The lawn care industry is one of the most profitable businesses that could be grown into a million-dollar business if done properly.
People love to have well-kept lawns to enhance the look of their homes. But due to their busy lives, they always look for people to care for them, which is why lawn care services are highly coveted.
Starting a lawn care business legally is not as hard as it sounds, as long as you know what to do.
You must do some homework about certain things, such as how it works and what legal requirements you must fulfill before starting your business.
In this guide, we’ll be sharing all the major steps you must follow to start your lawn care business legally.
Let’s jump right in!
Steps To Starting A Lawn Care Business Legally
Here are the steps you must follow to set up and operate your lawn care business legally:
1. Choose a Business Name
Start with choosing a name that suits your lawn care business well.
Your business name serves as a cornerstone that represents the purpose of your business and helps customers identify your brand.
Make sure to choose a creative name that is easy to market and makes your business stand out. Avoid names that are confusing, hard to spell, or already in use by someone else.
2. Choose a Business Structure
Selecting an appropriate business structure that aligns with your business goals is one of the biggest considerations while starting a lawn care business.
Your business structure affects everything from how your company will get registered to your day-to-day operations, taxes, the paperwork you need to file, your liability to raise money, and how much your assets are at risk.
You can choose from the following three business structures:
1. Sole Proprietorship
If you are the sole owner of the business, you can go with sole propriety of business structure. It is easy to form with less paperwork, requirements, and taxes and gives you more control over your business.
A partnership is a business structure suitable for those running a business with two more people.
It allows you to combine resources, share the operational burden, and share profit and losses with other partners.
3. Limited Liability Company (LLC)
LLC is a business structure that combines all the best elements of sole propriety ships, corporations, and partnerships into one business entity and provides a higher level of protection.
It gives owners tons of flexibility in arranging a business for the specific needs of the investors, liability protection, and tax advantages.
3. Register Your Business
Next, register your lawn care business as a legal institution with your regional government. The process of registration may vary depending on the country of your residence.
Register your business as a legal entity to keep your professional assets separate and protect your assets from any form of business debt.
4. Set up a Business Bank Account
To operate your lawn care business legally, you must have a dedicated business bank account to keep your assets separate from the company.
Having a devoted business account makes it easier to keep track of your cash flow to ensure your taxes are paid timely, build a credit profile, and provide financial security in case of any legal allegation.
5. Get a Lawn Care Business License
Just like any other business, a business license is essential to start your lawn care business legally. In many states, you can run a lawn care business without a license unless you offer fertilizers, weed, and pest control.
You can contact the Small Business Administration or chamber of commerce in your state to get information about which business license you should apply for.
Typically, a business license costs between $75 to $400 per year, depending on your state and region.
6. Get an Employee Identification Number
If you are planning to hire workers, you must apply for an Employee Identification Number (EIN). It is a nine-digit number assigned to businesses to allow them to operate their business.
The Employee Identification Number is used by the IRS to identify the employer for tax reporting purposes.
And banks will also ask you to show an EIN to open a bank account and apply for credit.
7. Obtain Insurance
Obtaining insurance is necessary to protect your lawn care business if something goes wrong in the future.
Business insurance protects from losses caused by injury, unforeseen accidents, and property damages.
Here are the insurance plans you might need depending on the type of loss and coverage you need:
- Property Insurance
- General Liability insurance
- Health Insurance
- Worker’s compensation insurance
- Commercial vehicle insurance
- Business owner policy
- Employment practices liability
We’d highly recommend consulting with an insurance agent to see what type of insurance would be best for your business to make an informed decision.
8. Get a Tax Registration Number
Finally, you’ll need to get a Tax Registration Number (TRN), which is a 15-digit number.
This is issued by Revenue while registering your business as a sole trader, partnership, trust, or company.
The TRN is issued once for a business and used in all invoices, documents, and financial transactions, such as Tax credit notes, VAT Return Filing, and tax invoices.
To apply for a TRN, you need a Personal Public Service Number (PPSN), which will become your TRN once you register for tax.
9. Additional Certifications to Consider
While it is not mandatory to have additional certifications to operate your lawn care business legally, obtaining some training certification would make your business stand out from competitors.
Certifications allow you to prove your expertise and develop a solid foundation to build your brand name and credibility.
The National Association of Landscape Professionals (NALP) offers plenty of certifications in lawn care, tree care, landscape, and much more to help new companies to let their light shine!
Amit Gupta is the founder of National Planning Cycles, a company that helps startups, individuals, and small businesses with their financial planning. He has a vast amount of experience in the finance sector, having managed Google Play accounts for some of the world’s most successful unicorns. Amit is an expert in his field, and he uses his knowledge to help others achieve their individual goals.