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Malrex,
As far as licensing is concerned, it varies from place to place. In my neck of the woods, (Long Island, NY), I need a Home Improvement Contractor's license to operate a landscape business, (I'm landscape construction).
I also need insurance. Even if you're not required to have insurance, you'd be foolish not to have any. A basic policy will set you up with 1 million in liabilty and 500 grand in property damage.
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There are two rules regarding insurance.
Rule number one:
DO NOT OPERATE A LANDSCAPE INSTALLATION BUSINESS WITHOUT INSURANCE!
Rule number two:
DO NOT FORGET RULE NUMBER ONE!
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Also, it would be a good idea to set yourself up as some type of corporation either now or at some point in the future. This will protect you from having personal assets placed at risk in the event of a legal action or some other situation where you're facing any monetary liability.
As far as wholesale purchases are concerned, if you have a license, then that's all that's needed to "get in the door" at most wholesale landscape yards. In the absence of a license, you'll have to prove that you are indeed a business and not some happy homeowner looking for a discount and how you do that will be dictated by the policies of the landscape supplier. Usually this will simply mean that you'll have to produce your corporation papers or whatever other business documents you have.
Do not look to set up any accounts right away. Just pay as you go for now. As you grow, and especially if you set up multiple crews, you may be running multiple jobs and then a credit account will be helpful.
But as a sole proprietor it isn't necessary.
As far as buying wholesale goes, you will most likely have to pay sales tax for your purchases at the time you buy them. You simply pass on that cost to your customer.
Here, and I'm sure most everywhere else, the only folks who can purchase wholesale merchandise with a tax number, (and not have to pay sales tax to the wholesaler), are people who can prove that they are a retailer and that wholesale items will be sold to the public as retail items and that sales tax will be charged at the point.
You are not a retailer, so you will have to pay the sales tax when you buy.
Lastly, as a sole proprieter being a "force of one" I can assure you that you will quickly come to your senses and seek to employ people to help with labor. I've been down that road, so trust me on that one.
Digging holes in ninety degree heat with nothing to keep you company except the birds is FOR the birds!
But, since you won't have employees right away, a good idea would be to seek out some dependable rental places so that you can rent any necessary material handling equipment to help you get things done.
A small skid-steer, maybe a mini-skid, a power wheelbarrow and so on will make things much easier on your back and on your schedule. And once again, those costs are passed on to your clients.
There are grey areas in passing on rental fees and you'll find out what those are as things progress. Basically it boils down to how much a piece of equipment costs you in a rental versus how practical it is to try to insert the entire cost of that rental into a job quote without having it drive the quote too high.
For instance, say a job is basically a simple job, but one aspect of it requires you to rent a skid-steer for a day. Sometimes, depending on the skid-steer, that can add over $200 to a job. If the job is only a few hundred dollars to begin with, that additional cost may drive the price high enough to cause a potential client to back out, thinking you're trying to overcharge them. The best way around that is either 1/2-day rentals, using the equipment on more than one job in the same day, (iffy), or simply pro-rating the cost across several jobs in order to keep the single-job cost low.
That's a situation that is best handled as it presents itslf and there is no pat answer for all situations. Once you get growing and you purchase your own equipment, that problem disappears.
I can't think of anything else to say other than to watch your numbers and your time and never guess at anything. If it's something you haven't done before, either seek out others who have, or take the time to imagine every step and try to establish as realistic a timeframe as you possibly can.
And always remember Murphy's Law: "If something can go wrong, it will". In other words, hope for the best, but plan for the worst. If you anticipate problems and have well thought out solutions to those problems, you'll be one step ahead. Never take anything for granted and don't work for free!
Good Luck!
-JP
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Any activity becomes creative when the doer cares about doing it right,
or doing it better.
- John Updike
Last edited by John Palasek : 03-11-2007 at 12:42 AM.
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