Starting a lawn care business can seem complicated but with the right guidance and resources, you can be up and running in no time. There is often confusion among business owners and those wanting to start a business, about how to license and structure their business correctly.
The licenses needed to start a lawn care business vary by state and city. This means a little bit of research needs to be done to determine if you live in an area that requires a business license for lawn care. First, you need to determine what city, county, and state you will be conducting business in. Second, you need to contact the business licensing agencies for each of those entities and figure out what licenses are required to start a lawn care business in your area. Most states require a basic business license, while some states require a license for different services such as applying herbicides.
This may seem somewhat complicated, but if you reach out to your local chamber of commerce or state’s small business association, they often have an expert who can point you in the right direction. They will help you answer the question, "do I need a business license for lawn care?" Have other questions in mind, such as does a lawn care business require a license, or is it optional? What business license do I need for lawn care? Do you need a business license for lawn care in my city? How to get a lawn care business license? Do I need a license for lawn care businesses in my state? And, how much does a lawn care business license cost?
Research is needed to determine the exact lawn care business licensing requirements.
The purpose behind a business license is a combination of two things: one, to register the business to collect a fee for conducting business, and two to mandate specific qualifications. Most likely, if you're starting a lawn care business, you will be required to get a general business license. This license requires you to pay a fee. Some places require no licensing, and you can operate without a business license.
Again, research is needed to determine the exact lawn care business licensing requirements. When you call your local city government to ask how to get a lawn care business license; if one is required, they will be able to help you determine your lawn care business licensing needs.
If required, most lawn care business licenses are around $100 per year. Remember, this is much cheaper than getting fined or having to stop working because you didn't have a license.
Once you determine if your lawn care business needs a license and you have obtained the proper lawn care business license, you then need to look at what type of business you wish to run. The big decision to be made is whether to form a business entity or keep the business as a sole proprietor. A sole proprietor business calls for no government filings. An LLC, or limited liability company, requires filing the proper paperwork with your state.
A sole proprietor is simply a business run by an individual with no formal corporate structure. In essence, the company is the person. This may seem great, but there are several downsides to operating a business this way. The main problem is liability. A person running a lawn care business under a sole proprietor risks all of their personal assets and money. Should anything go wrong during lawn care operation, the owner would be personally liable for all damages. For example, if you were mowing grass and a rock was thrown through the mower, and hit a person standing on the sidewalk, you would be liable to that person for any injuries.
An LLC has many business benefits. First, it protects your personal assets and money. An LLC is treated as a separate entity from its owners. If something were to go wrong and your lawn care business was to be sued, a properly formed and operated LLC would shield your personal assets from being in jeopardy. The second advantage is taxation. An LLC is taxed as pass-through income. This means for tax purposes, the income from an LLC is reported on the individual's income taxes as regular income. This is the same way sole proprietor income is taxed.
Remember, when calculating startup costs, factor in not only equipment but also licensing and other fees. Your business license for lawn care services could cost anywhere from $100 and up. There may be additional licenses needed to start a lawn care business, such as a tax license, or permit to use specific heavy equipment in particular locations.
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