Starting a llc and picking up some smaller jobs

[ACDII]

Yeah, this is one of those subjects that sounds good, in your head, until you start looking into liability.

Last year when I refinanced the house, we have 5 acres, and majority is fenced pasture for horses, I looked into ways to reduce property taxes. Horses are not considered livestock, so when we moved in 20 years ago, the taxes went from nearly nothing, Farm based, to residential taxes. Now I am looking to change that. One thought I had, an Orchard. Looking into liability insurance for that opened my eyes up. Besides just being insured, since it is a food product, there are also licenses involved, and a whole bunch of other things. If someone got sick because they didn't wash the cherries when they got home, even though whatever made them sick could have got on them from anywhere after they were bought, that person can sue me.

Nope, not going that route!

I finally settled on hay, but still need an LLC, among other things, including a business plan etc. that we are working on. Even though it is hay fed to animals, there is still liability to be concerned with. If say a piece of metal got caught up in a hay bale and a persons horse got injured from it, it comes right back to me, so even something as simple as a $5 bale of hay can cause me to lose everything.

#1 thing you HAVE to do is protect yourself. Good insurance, a good business plan and a good accountant are the 3 things that are a must if you want to do this.

 

[SteveBX23]

I have found that asking for such advice from the masses brings out a majority consensus as to why you shouldn't do it. Ask yourself if you want to do it and challenge yourself. If so, then do it....You'll figure it out along way...

 

[Steppenwolfe]

re: tile floors
odds are good the floor joists and subfloor were not spec'd for tiles. I've passed on many tile jobs unless joists are 12oc, 5/8T&G screwed every 6" and glued.

All tile installations should have a minimum of an 1 1/4 INCH thick sub floor. That is where the problems start. Not enough sub floor.

 

[lugbolt]

Owning/running a business is rewarding, but as I said before it is work.

I've done the side business thing. If you are "good" at what you do, and you have a good customer base, the "side" part will quickly consume you to the point where you will have to make a side business a full time gig, or ditch it and go back to working for someone else. BTDT. Hopefully the former occurs, and success is achieved.

 

[D2Cat]

The worst you can do is strike an underground utility.

No, the worst you can do it strike an underground utility that has not been located by you with a confirmation number or dug before location date.

 

[GreensvilleJay]

Here in Ontario, 'call before you dig' is a free service BUT (here's the catch..) ONLY from roadside to front of house ! EVERYTHING out back ,YOU have to pay for the locate...unless utilities are run from back of property.
BTW locates can take 2-6 WEEKS.. ACTUAL new gas service ?? anybody's guess, been almost a YEAR for one neighbour, another 'cheated'.but legit..... ran from existing shop on property.

 

[Jchonline]

I just bought a 2380 with a fel and GS0548. I have been kicking arround putting it to work picking up some smaller jobs. Wondering how many guys here have been successful starting a business with a small tractor?

Get insurance. You want good liability at a minimum.

 

[B737]

many debby downers in here.

I agree with everything @dirtydeed and @SteveBX23 said, couldn't say it any better myself.

I'll add, when the LLC is not your primary form of income, particularly if you are a W2 employee, there are a lot of tools that now become available to you by having an LLC. Pick something you enjoy. Do it legally, responsibly, & professionally. The goal may not be to "make money". I'll leave it at that.

allow me to counter some of the debby downers in here:

- most people you meet are good people. Do a good job for them and they will be happy.
- getting insurance is no big deal, 2-3 million dollars in coverage usually isnt more than $1000
- calling "one-call" before you dig is a non-event. Call them or just do it online. The system is set up for people who didn't graduate elementary school. You can easily get a mark out within 2 weeks and if you need them to come out inside 24 hours its no big deal.

 

[Benhameen]

many debby downers in here.

I agree with everything @dirtydeed and @SteveBX23 said, couldn't say it any better myself.

I'll add, when the LLC is not your primary form of income, particularly if you are a W2 employee, there are a lot of tools that now become available to you by having an LLC. Pick something you enjoy. Do it legally, responsibly, & professionally. The goal may not be to "make money". I'll leave it at that.

allow me to counter some of the debby downers in here:

- most people you meet are good people. Do a good job for them and they will be happy.
- getting insurance is no big deal, 2-3 million dollars in coverage usually isnt more than $1000
- calling "one-call" before you dig is a non-event. Call them or just do it online. The system is set up for people who didn't graduate elementary school. You can easily get a mark out within 2 weeks and if you need them to come out inside 24 hours its no big deal.

well said!

 

[Cpmm4m4]

many debby downers in here.

I agree with everything @dirtydeed and @SteveBX23 said, couldn't say it any better myself.

I'll add, when the LLC is not your primary form of income, particularly if you are a W2 employee, there are a lot of tools that now become available to you by having an LLC. Pick something you enjoy. Do it legally, responsibly, & professionally. The goal may not be to "make money". I'll leave it at that.

allow me to counter some of the debby downers in here:

- most people you meet are good people. Do a good job for them and they will be happy.
- getting insurance is no big deal, 2-3 million dollars in coverage usually isnt more than $1000
- calling "one-call" before you dig is a non-event. Call them or just do it online. The system is set up for people who didn't graduate elementary school. You can easily get a mark out within 2 weeks and if you need them to come out inside 24 hours its no big deal.

I was really concerned about insurance costs but that's not bad.

 

[Millsertime]

The goal may not be to "make money". I'll leave it at that.

I'm only assuming you are talking about tax write offs. Perhaps, I'm wrong but if I'm right; I agree 100%. You might not make a ton of money but it will help you afford certain things you otherwise couldn't justify. IMO.

 

[ACDII]

My HO insurance company called yesterday to verify that we did get a new mortgage and the insurance lien changed. While I had them on the phone I asked for a quote on tractor insurance and liability insurance for selling hay. Waiting on a response, but they asked how many bales and how much income.

I looked up the county yields on hay, which for where I live is 3.85 tons an acre, with 60 pound bales that comes out to roughly 430 bales per cutting @ $4 a bale as a rough estimate, $3400-$5200 a year depending on number of cuts in the season. Actually was more than I thought it would be. Hay could be between $3-$5 around here, so took the middle number.

I still think having it as an LLC is good as it provides separation from personal property and business. I will set up the equipment as a lease to further protect it in the event a horse cuts his lip on something that got stuck in the bale.

Can anyone else think of a reason when producing hay that could be a liability? It will just be me and the kids harvesting so no helpers to worry about.

 

[dirtydeed]

Can anyone else think of a reason when producing hay that could be a liability? It will just be me and the kids harvesting so no helpers to worry about.

How will your hay get to the consumer? Will you or someone else be delivering it? Check into that aspect with your insurance company.

 

[NHSleddog]

WOW - If it wasn't for small business, there would be no business at all.

I have been "jobbing" with my tractor for over 30 years, it is the most enjoyable and physical time spent for me and one of the only things that gets me outside regularly. Putting kids through school with the extra earnings doesn't hurt either.

In the 30 years (thousands of tractor hours) I have never not been paid. I have never been sued. I have never been brow beaten into doing additional free work. I have no idea where some of the posters above work or if they just head through life with "sucker" on the forehead but I have never ran into any of these issues. I did back into a garage door with the rake once and it was easier to just pay for the damage there and then rather than an insurance claim. Still no problem and I have been back to them many times over the years.

Lawn renovation, driveway grading, tilling, drilling, seeding etc. There are a whole lot of people out there that have a job for a tractor and no need to own one.

At a minimum you will need a business registered so that you can get insurance. If you are going to be working hourly, commercial liability will cover most of your needs. If you are going to be "bidding" jobs, you will want to add an errors and omissions policy as well.

 

[ACDII]

How will your hay get to the consumer? Will you or someone else be delivering it? Check into that aspect with your insurance company.

Pickup to start since yields will be minimal. If things pickup down the road, then getting a trailer and delivering might happen, then of course it falls under auto insurance, but for now, no delivering.

 

[JimmyJazz]

My HO insurance company called yesterday to verify that we did get a new mortgage and the insurance lien changed. While I had them on the phone I asked for a quote on tractor insurance and liability insurance for selling hay. Waiting on a response, but they asked how many bales and how much income.

I looked up the county yields on hay, which for where I live is 3.85 tons an acre, with 60 pound bales that comes out to roughly 430 bales per cutting @ $4 a bale as a rough estimate, $3400-$5200 a year depending on number of cuts in the season. Actually was more than I thought it would be. Hay could be between $3-$5 around here, so took the middle number.

I still think having it as an LLC is good as it provides separation from personal property and business. I will set up the equipment as a lease to further protect it in the event a horse cuts his lip on something that got stuck in the bale.

Can anyone else think of a reason when producing hay that could be a liability? It will just be me and the kids harvesting so no helpers to worry about.

Don't forget your input costs. Seed, fertilizer, diesel fuel, Gatorade.....

 

[JimmyJazz]

My neighbor has been making hay on my farm for 50 years. It used to be his uncles place. I suggested to him that I buy a big farm and he could make the hay and we could come to some kind of a sharing arrangement. He laughed and said he hated making hay and in no way was he interested in making more. I came to the conclusion that's its more fun watching him farm than trying to make a buck doing it myself. There are online forums devoted to this topic. Mine is not an unconventional view. Equipment costs , weather conditions, pricing ...... Lots to consider. The best bang for the buck if you have the time may be greenhouse raised vegetables. Look up Neversink Farm on YouTube. Good luck.

 

[ACDII]

Oh yeah, that was all under consideration. Now I am not doing it to make money, but to save money. Wait! WHAT?

When we moved here in 2001, roughly 4 acres were in crop. When I put in pastures for our three horses, the assessment came back in 2003 that it no longer qualified as farm land and was switched to the residential tax bracket, more than DOUBLING our realestate taxes because horses are not considered livestock.

I am down to one old horse now, and am converting 3.4 acres back into crop land. Taking down fences, removing a hydrant. Since the pastures were planted with seed for horses, and one acre is currently well established, making hay was the least costly endevour, other than leasing it out, and none of use want to see corn or beans in our back yard, because a full acre IS our back yard.

I have already spoken with the county assessor, and with the FS for a soil test, and will get the proper fertilizer mix this spring, as well as the proper amount and mix of seeds for roughly 3 acres. I purchased the Hay baler, mower and rake last year for less than $4K, and just waiting on the tractor.

I figure if it cuts taxes in half, and we make a little on the hay, then it is worth it, and gives me something to do as I like to tinker.

 

[B737]

ACDII that is awesome, what a great plan and you have the to tools to do it!
It took me a long time to figure out to work smarter and use the system in your own favor. I'm a slow learner, but boy does it work.

 

[ehenry]

A note on the hay business that I didnt see mentioned: Be prepared for the DOT cops if they pull you over with a trailer load of hay. They will ask questions as to who's hay it is, where you're hauling it from, where you're hauling it to and why. The answers are : its your hay, hauling it from your field, hauling it to your barn, for your livestock. There are other questions they may ask. You have to answer those questions correctly cause if you don't then the DOT cops will go down the rabbit hole that you're running a commercial hay operation and you'll receive a DOT colonoscopy right the on the side of the road. Hauling permits, tire tread depth, if a diesel tow truck fuel permits, plus they may check the fuel for off road dye, trailer lights and anything else the officer can write you up for and from experience those guys will get the book out of their vehicle and look for things to write you up for.

Be careful and stay safe.......