Hi my name is Nick!
I am completely new to this industry although I did work for a company called AMS back in PA, which would send work to PP companies all over the nation via HUD, Fannie Mae, etc. So I get the industry from that point of view, but here are my questions that I would greatly appreciate it, if someone could help me with answering them.
For your knowledge, I am currently located in Southern California (San Diego) and plan on starting my company here, and doing all work within a reasonable distance (hour or 2) of San Diego.
1. What is the average start-up cost of a company of this nature?
2. What do I absolutely need in order to start one? (LLC, General Liability, etc)
3. How do I know if there is an abundance of jobs in my area?
4. Can I only do initials and re-occurring as a PP company? Do I need a contractor's license to do other small bid work?
5. For a small business what would be an average income in this industry?
Thank you so much in advance... I'm feeling hopeful!
The very first thing you must do is find a good accountant that you are in no way shape or form related to and have them help you set up your accounting procedures. This will save you when everything else fails. I have had the same accountant for 18 years now and he has saved me tens of thousands of dollars that I would have paid the IRS because there is no way I could possible hope to know all the tricks to filing my taxes correctly.
Start up depends on what you have vs what you need. At a minimum you will need a full set of commercial lawn equipment – a trailer, mower, string trimmer, edger and blower. You will also need tools for trimming hedges and trees. This can cost from a few thousand dollars for used equipment to over $10,000 for new equipment. One new commercial ride on ZTR mower will cost between $7,000 and $14,000. The stuff at Home Depot is NOT commercial equipment.
Then there is business licensing. I recommend a corporation for the protection it provides you. You will need general liability insurance and worker’s compensation. You may also need errors and omissions insurance as well. Costs for this vary from state to state so you will want to check with you local insurance agent for that. I would speculate that you will need between $3,000 and $5,000 for down payments on this.
You will also need to have some sort of capital to live on for a couple months, at least, until you get your first check.
To do this right you need about $20,000. Or you can wing it like most of us did and scratch and claw for every penny you get just to survive until you learn enough from the school of hard knocks to start being more profitable.
There is really no way to know how many jobs are in your area at any given time. For example, I am negotiating a contract right now that will give me 20 more lawn cuts each week. However, during the peak lawn season I happen to know this guy needs someone to cut about 400 lawns per week. If I can prove myself with 20 lawns I will see if he will toss me another 100 to 150 when the season ramps up.
Diversify or die. In order to maintain a steady income stream I have several customers that are not P&P. Look for commercial and residential lawn accounts. My residential customers pay all of my overhead during the spring and summer.
The need for specialty licensing depends on your state and local municipalities. I have no clue as to what you need where you live.
There is no average income. During lawn season I tend to make 2 to 4 times what I make in the winter. So sock away some money to make sure you can pay your bills during the slow months.
Hope this helps.