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T-Mobile Advertiser
This summer there are 250 reasons to
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Paul Jamison
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Podcast Host / Narrator
hello and welcome to the Green Industry Podcast, your go to guide for building a more profitable and thriving lawn care and landscaping business. Your host Paul Jamison is the author of five best selling books including Cut that Grass and make that Cash and his latest Level up your Money, all available on Amazon and Audible. Now get ready for more expert insights and practical strategies to boost your business and level up your life. Here's Paul Jameson.
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Paul Jamison
Welcome back to the Green Industry Podcast. We are here to help you take your lawn care business, your landscaping business to the next level. Behind the scenes here we have been, we being Mr. Producer and I have been working on a new project of coming out with the second edition of Cut that Grass and make that Cash, the book I wrote about how to start and grow a successful lawn care and landscaping business. So last night I started working on the chapter about choosing the right company name, your legal setup, all those found foundational components. And so I want to talk about that on the podcast today while it's fresh on my mind and kind of have it as a checklist for you to make sure that you're doing everything right with your company name, with your legalities. And I want to start with this, I think this is the most important thing is that your bank accounts are separate. Let me explain what I mean by that. Anything that we do business related we should have done in our business checking accounts, our business savings accounts. So how I have this set up for me is I have two separate banks that I use my bank that I use for all of my personal stuff. It's a completely different bank than the one that I have for all my business stuff. I like to have them separated. I don't I don't want to be able to just transfer money from my business to my personal like under one account because it could, could easily get muddied for me. So what I do, what I did, what I do, what I suggest you doing, and I'm explaining why this works the best. But it has two huge benefits. Number one, if you go to sell your business one day, you want to have the cleanest records possible because that's going to help put you in position to sell your business for maximum dollar. So if private equity comes to you and, and they're like, hey, you know, we see you got all these accounts in this neighborhood, we're going to, you know, we'll buy your business from you. Well, how you, how they come up with their valuation of how much your business is worth? There's many factors, but the cleaner you can make it for them to go through your history of your banking and everything and you have all your business transactions, what came into your business, what came out of your business, what all squeaky clean, then that's going to help you in the long run. You know, them offer you the most for your business. Now in the here and now. The reason it's important to have this separation between your business finances and your personal finances is it also helps when I meet with my financial team, Joey and Megan Koberly from the landscaping bookkeeper with Sheila from the, she's a tax specialist. They have clean banking to look at so we can see the true health of what is going on or lack of health of what is going on in my business. Because the numbers tell a story. And when I have accurate numbers, then I can see what's the truth of the story of my business. And so for me, I have, and I'm not, I'm not gonna, I'm not gonna name names of, of, of these banks or whatnot. Well, I will, I will shout out one bank for you. That's Relay Banking. They're an online bank and they can, you can have multiple accounts with them. But for your, you know, like, I like to have one of the banks that's a local place where I can physically go to. So I, I, I, I will say this. I have one online bank where you like, it's online and then I have one that's a local one here that I can physically go to. And I, I do go to it. And the guys that work there, they know me because I, I, I go in there, I don't say regularly, but if I need to talk to them about something in person, for example, I had all these bogus fees. I was like, what in the world is this is 52 fees kept popping up on my thing. I, I forget what it, it was the most. It was like analysis fees. I go marching in there, you know, and can I speak with a banker? You know, I was pretty hot and I was like, what is this world analysis? What do you got now? And analyze it, you know what I mean? And the guy's looking and he's oh yeah, I don't, I don't know. And then thankfully refunded them after, after I, you know, you know, got, got pretty upset. But anyway, here's my point. 100% of the money that comes into my business. So I use the CRM called Jobber and I try to get my customers credit cards on file. All right, Whether they pay me with a credit card on file or some of them will say hey, we'll just wire you the money with ach or just we'll wire. So however the money comes in, it all goes in through Jobber. I, I send my invoice through Jobber. They pay through Jobber. It makes me look professional. It's, it's easy way again with a CRM link to my business banking. When I go to sell this business one day, you're, you're, the people are going to look at it and everything's going to be clean. They can see a 100% accuracy of every transaction in my CRM of a customer that I did business for. Like the date we did the work, what they pay me, all of that's in my CRM and then everything is in my bank. So anyway, all the money goes from my, from Jobber into my business banking account. So I know exactly how much revenue to the penny I earned this year, this month, this quarter. It's all accurate. I don't if I don't collect cash, but if a customer, and again I don't. This hasn't happened in years. But if a customer were to pay me cash or mistakenly write me a check and put my name on it, Paul Jameson or whatever, I wouldn't put that in my personal. I would put that in the business. I want to know to the penny how much money my business earned for my own record so I can evaluate how I'm doing. And you know, there's so much talk about the analysis fee. There's so much I want to analyze within my business. I need accurate numbers for. And then, but then secondly, if you go to sell this puppy one day, you you have squeaky clean records. So anyway, I, this is all, this is all preface. I didn't even Let me look at my notes here from, from the, the new chapter in my book I'm writing about choosing the legal setup. I, I haven't even started on, on choosing the right company name and legal setup yet. I want to talk about the banking first. So let's do this. Let me get a sip of water and cool myself down here. And coming up, after we hear a word from today's show sponsor, I'll share how you make sure you pick the right name for your company. What's bad names, what's good names. And then the legal setup of the different legal structures for your business. Sole proprietorship, you know, limited liability company, corporation C Corp. S Corp. All this legalese. Let's talk about it. Coming right up.
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Podcast Host / Narrator
Here's Megan Koberle from the Landscaping Bookkeeper.
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Megan Koberle
The Landscaping Bookkeeper is a company for lawn care businesses under 300k. We like to onboard you under 300k so that we can educate you on your finances. Many bookkeepers love numbers, but we love the education behind the numbers. So each month we want to organize behind the scenes, but then we want to meet with you monthly to deliver your statement of cash flows, your profit and loss called the income statement and your balance sheet. And our real goal is to help you to understand how each of those work together so that you can see the health of your business. And not just crunch numbers. It's about actually putting them inside a framework so you know when to purchase and what to do with each of those facets of business.
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Podcast Host / Narrator
Schedule your free 15 minute call today at the landscaping bookkeeper dot com.
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Paul Jamison
Are you serious about leveling up your lawn care business this year? Then you need to be in Louisville, Kentucky from October 20th through 23rd for the equip Expo. This is the super bowl of our industry, featuring 30 acres of outdoor demos where you can test the latest gear from every major manufacturer. Don't be the pro who pays $120 at the gate. Go to the link in the show notes right now. Use promo code Paul at checkout and you'll save 50% off. That's half off your registration, locking in your pass for as low as $2012 and 50 cents. Don't wait. Register today at the link in the show notes. Use promo code Paul. You'll save half off and I hope to see you soon in good old Louisville, Kentucky. All right, we're going to talk about choosing your right company name and how to legally structure Your business and all of that. And the reason I got so fired up on the front end of this show here is because when I started my business, this was all the way back in 2011. I intertwined my business and personal and things were disorganized and just, it was like a spider web and it was not good. And also, I didn't start using a CRM until years later. So if I were to start a lawn care business today or tomorrow, there would be some foundational things that I would do right out of the gate. And the reason that you need to get your legality set up at the onset is because that's the information you're gonna need to open your business checking account and set up your Google business profiles, which is the kind of the first two moves I suggest making. I mean, there's multiple first moves, but if you had to start somewhere, set up your business in your state. Here in Florida, we have something called Sunbiz. Makes it very easy to get everything set up through Sunbiz. And then you take that information to the bank and say, hey, I've started a lawn care business. I'd like to open up a checking account and a savings account for my lawn care business. And then you can look on the bank's website ahead of time what information they need. And just make sure you bring that information to the bank with your Sunbiz documentations and business entities and all that set up. And it should be easy peasy lemon squeezy to set that bank account up with your business at the bank and then set your Google business profile up. Where you request your Google business profile, they're going to want the confirmation of your address and business information. So start that process and get those things set up. So anyway, quick shout outs to my bookkeepers, Megan and Joey Koberly. When my business started really shifting into legitimacy and higher profit and true success was around the time and I was maturing as a person and as a businessman. But around that time I got connected with Megan Koberly and Joe. Her husband. Joey at the time wasn't even, he, he wasn't even working, you know, full time in the business. He had another job. And so my first few onboarding calls was with Megan and she was, I, I kind of joked. She was kind of intimidating and scary and she's very like, just detail oriented and, and I, and I was like, oh man, I'm this, you know, my, my business. I was like, I don't even know that she's going to want to work with me. But they were so patient. We got everything cleaned up, literally. They did, like, a big cleanup of my bookkeeping. And then from there, we're able to, you know, continuously work together month after month, year after year, and see the pro, you know, because what. What gets measured gets improved. It gets managed when you're paying attention. That simple thing of just measuring, knowing exactly what's going on makes a big difference. So anyway, if you need a bookkeeper, check them out. The landscaping bookkeeper, Megan and Joey Cobra. All right, so let. Let me pull up my notes here from my book.
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Podcast Host / Narrator
All right.
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Paul Jamison
They got a new chapter I started writing last night, Choosing the right company name and legal setup. So when it comes to the name, why people get too cute with this, I would not include my name in my business name. So my first business was Paul Jameson Lawn Care. And then I did PJ Lawn. And then I Jameson Landscaping. And I. I had changed in those first few years. I had changed my business name multiple times. I honestly didn't know what I was doing, but it was centered around me. And so I remember I had this Ford F150. It was a red Ford F150. It was actually yellow at first. And I got a. My friend did an amazing paint job on it. I mean, he did a fantastic job repainted the whole thing professionally. Looked sharp.
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Podcast Host / Narrator
It looked.
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Paul Jamison
Looked brand new. Hey, I got my. Got my decals on there. Jameson Landscaping. But it was. It was all about me. And so where's Paul? Paul, you know, and I was the one on the customer's property. And in hindsight, that wasn't the right move. I mean, it. In the moment, it made sense because everybody loved Paul, right? And where's Paul? And I was always on the customer's property. But when you go to sell your business one day, and let's say you truly sell your business, and now private equity or a larger lawn care business has purchased your business. You're. You're irrelevant, because now you're part of their business. So you need to make it more generalized. And I would absolutely incorporate in your business name the term whatever is one act applicable to you. But something like lawn care, landscaping, turf, property maintenance, I wouldn't even go too far beyond those. But where I made my mistake, it was Paul Jameson Lawn Care. And eventually it was Jameson Landscaping. So the good part of that was my core services was obvious to anyone who heard that. When you heard Paul Jameson Lawn Care, you're like, yeah, he probably does lawn care now. Customers are a little confused. Does lawn care mean Mowing grass Or does it mean fertilizer and weed control? Right. And I was doing it all honestly back then. Landscaping. That tells a little bit more. Hey, you also do more than just mowing. You do, you know, landscaping, right? So mulch flowers. So I would include one of those words in your, in your, in your business's name so that your prospective clients instantly know what you do and how you can help them. Now, here's the mistake I made that I would. I would fix if I could go back and start over is I would include something about my geography and my service area before that keyword of lawn care, landscaping, turf, or property maintenance. So, for example, I'll use the neighborhood. You're really like the heart of your route density. Maybe it's the name of a town, a city, a neighborhood. We'll use. I used to live in Duluth, Georgia. Okay. So we use Duluth as an example.
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Podcast Host / Narrator
So.
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Paul Jamison
And you'd have to check if your business name is already taken by somebody else. There's a. Your state should have a database where you can check if there's any company that currently has this name for this business. So if someone already took it for, you know, move on to the next one. There's several options. But if I could go back and start over.
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T-Mobile Advertiser
I.
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Paul Jamison
And I. And my route density is I want to take over Duluth, Georgia. Okay. Then I would have named my business Duluth Lawn Care. Or honestly, with what I know now, I would have actually named it Duluth Landscaping. Or actually, this is probably a good one. I would name it Duluth Lawn Care and Landscaping. That's actually what I would name it, Duluth Lawn Care and Landscaping. So now when a customer hears Duluth Lawn Care and Landscaping, they pretty much know what does that business do. They do lawn care, they do landscaping, and they service Duluth, Georgia. Like, oh, good, I live in Duluth now. Somebody who lives down south of Atlanta, McDonough. When they hear that, they're gonna like, oh, well, you know, I don't know if they do this service area shout outs to my service area. Chris Gentry can plug it into your website. When they just type in their address on your website, it'll instantly kind of tell them if it's a good fit. If you're in the area, if they're in your service area or not. So that's a good name. Or if there's like the name of your neighborhood. There's a name of a neighborhood. Say it's called Hunter's Green. Okay. You could call it Hunter's Green Lawn Care and Landscaping. Just like that. Now they know. Okay, wow. This is a lawn care landscaping business in my neighborhood. Winter, winter chicken dinner. Just making sense, Mr. Producer. So my mistake was Paul Jameson, Lawn Care. I don't like that. I like the lawn care part, but instead I would keep the lawn care part. I would add landscaping because I. And maybe you do, maybe you do, you know, something else. Whatever your service is, if you're, if you're a fertilization and weed control company, you could call it turf, you know, like Duluth turf, something like that. So it tells, it tells the customer by the name of your business, what service area you serve and what you do. My friend Jonathan Pitochnik, the name of his business is city turf. Now SETI's kind of generalized, but turf, it kind of tells you they take care of turf. But anyway, when you go to sell this sucker one day it's easier for them to buy it. All right, let's talk about the legal structures. There's sole proprietorship. That is basically you're an unincorporated business owned and operated by you, just a single individual. You are a sole right soul means one, I think, proprietorship. So this one is the simplest, it's the least expensive to establish. It's very straightforward with your tax, it goes on to what's called a schedule C on your personal return. Now the drawback to this one is you are personally responsible for everything in your business. If you, if your business goes into debts or you have a legal judgment or a lawsuit or you know, maybe a, you know, I've heard horror stories of employees damaging clients property or an accident occurs on the job site, you're at risk. Your personal assets are completely vulnerable. So that's the pros and cons of the sole proprietorship. And many experts in our industry suggest, let's say you're just a 16, 18 year old kid, you're just starting and you know, your net worth is, you know, just a few hundred dollars or a few thousand dollars and you're just, you're just trying to get your lawn and landscape and business up off the ground. I mean, a sole proprietorship might be the route you want to go. This is not legal advice. I would, I would, you know, consult a legal professional to guide you of which, which entity is best for you. And these are US legal structures. I'm not familiar with other countries legal structures, but the sole proprietorship is the simplest, it's the least expensive, it's very, very simple and straightforward. And a lot of folks go the route of the sole proprietorship. So that's kind of the, the one you start with, there's a, there's a legal entity here in the United States called a partnership. I won't, I would not do that in a million years. Dave Ramsey says the only ship that doesn't sail is a partnership. Because if you start, let's say, you have a partner. 50. 50, okay. And you, you know, you're a go getter, you're doing so good, and you just, you're just kicking butt and taking names and crushing it. And your partner over there, he's playing Call of Duty and being lazy and, and, and mailing it in. You guys are going to get upset at each other, and then eventually it's gonna, you're gonna have to, you know, divorce the business, so to speak. So don't do a partnership, in my opinion, because one partner does more than the other one, and he's just, it's just dumb. I, I, I don't, I don't, I don't recommend a partnership for a lawn care landscaping business. Just, it's your business. You go out there and you own it. You just got to determine if you want to do a, a sole proprietorship or a limited liability company or a, a C corp or an S Corp. So when you get into limited liability companies, this is basically a hybrid business structure that kind of, how do I explain this? It creates kind of like a legal shield between your personal life and your business operations. So it kind of protects your personal assets from commercial liabilities and lawsuits. So from a tax perspective, if you're llc. And again, I'm, I, I'm, I would consult a professional on this disclaimer. I, I'm just a guy with a microphone. All right? This is not legal advice or anything like that. Like, I would get a, you know, professional's opinion on what legal structure is best for your business. Okay, I'm just, I'm giving you the menu here. I'm not telling you what to do. I'm just showing you here's kind of what a sole proprietorship is, here's kind of what LLC is. And the way I understand it, I'm no tax expert, but profits can pass through your personal tax return by default. So you're not with llc. You're not getting, you're avoiding the double taxation. And then there's so much to the llc, because you can, I think there's an option to select the S. Corporation tax status later as you grow and stuff like that. So anyway, I would have a professional explain this to you. The LLC gets a little Bit more confusing. And then the one that really throws me for a curveball is the C Corp, the S corp, the corporation stuff. Because that's when you're now a formal legal entity. You're com, like you're completely separating the owner of the lawn business, landscaping business from anything that could go wrong. So basically when you go corporation route, that's the highest tier of personal liability protection. So the problem with that one, from what I understand, is C Corps, C corporations, they get taxed kind of more like it's almost like a double taxation on your earnings and dividends. And the S Corporation, from a tax perspective, that one's a little bit different because it elects the IRS to actually allow the owner, the operator, to pay themselves what they call a reasonable W2 salary. And then they can take the remaining profits out as a distribution which will, you know, probably reduce the self employment taxes. So the pros and cons with that one is obviously with a corporation. Well, obviously, maybe you've never heard these terms before, but that's the one that maximizes your asset protection. And there's a lot of paperwork and a lot of hassle, but you could do some tax savings with that route. I have friends that do the corporations and they tell me about the rigid operational formalities and the bylaws and the formal meetings and you know, you're paying more in accounting costs and there's a lot of paperwork hassle, all that stuff. So that's kind of the preview again, if you're just a 16, 18 year old kid and you're, you know, you're not doing millions of dollars in revenue, I mean when you, when you start doing millions of dollars in revenue, that's when you definitely need a tax specialist and a bookkeeper and an accountant. And all of them will explain to you, hey, here's the llc, here's the C corp, here's the S corp. And they'll get you set up, situated with all of that stuff. A professional. But if you're just a 16, 17, 18 year old kid and you just want to start your business tomorrow, you know, the sole proprietorship in most cases could be the simplest way just to get started. Because then once you get that set up, you get your business license and insurance, you can go to your local city or county office. I went in person. I think some of the stuff you can do online now and you just get a business license, then I would, you know, one of the first steps I would do is then get general liability insurance immediately. I would not step foot on A customer's property. I would not mow one blade of grass. I would not do anything until you get general liability insurance. Because even if you're a sole proprietor, you can still protect yourself to some degree with general liability insurance. You always kind of got a plan for the worst, right? I've seen rocks go through windows. I've seen ladders go through windows. Okay, I'm talking about my business here, right? I've seen pressure washer, you know, break windows. All right, General liability insurance, baby. You need that immediately. Like, you know, don't go on a customer's property without general liability insurance. So then once you set up your business, you get your business license, you get general liability insurance again. My first move is you're going down to the bank, local bank, credit union, and you're opening what I call the dedicated business checking accounts, the dedicated business savings accounts. I'll have a different podcast and I'm going to do a whole chapter in my new book, Cut that Grass and make that Cash, the second edition, how to start and grow a successful Lawn care landscaping business, about the different bank accounts that I personally have set up. Because all it's a whole system I have so that everything's organized, but the system contains two different banks, one for all my business stuff, one for all my checking stuff. So never mix personal and business funds. So I hope that helps.
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Podcast Host / Narrator
I gotta go.
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Paul Jamison
Busy, busy day around here. But I wanted to get this shared because it was fresh on my mind because normally I don't work late at night, but last night I was up late working on Cut that Grass and make that Cash second edition and writing this chapter about business names and legal entities. And all this stuff was fresh when I woke up this morning. So I was like, let me hit the. Let me record on my podcast and share this valuable information with you. So thanks for listening again. I know a little disclaimer here. I'm not a tax professional, I'm not a business structure, professional entity, anything like that. I'm just a guy who's run a business for 14, 15 years now. And I've, you know, I've learned, I've seen the consequences of some of these things. And I'm just sharing with you my opinion or my, my experiences, really. But I would, you know, make sure you make the smart decisions. So thanks for listening. Hope to catch you on the next episode.
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Megan Koberle
Peace.
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Podcast Host / Narrator
Hey, it's Marty, producer of the Green Industry Podcast. This episode is over, but check the episode notes for links to products and services that you heard about during the episode. And thanks for listening that refresh you've
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T-Mobile Advertiser
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