Landscaping

Plant: Camellia

Term: Business Structures

CamelliaCamellia japonica• Plant type: Interior Plant, Shrub • USDA Hardiness Zones: 7a to 9a • Height: 10 – 15 ft, Spread: 6 – 10 ft • Exposure: partial shade to full sun • Bloom Color: Lavender, Orange, Pink, Red, White,

Yellow • Bloom Time: Winter• Growth Rate: slow • Landscape Uses: Container, Espalier, Standard,

Specimen • One of few plants to flower in Winter

Business Entities

• When beginning a business, you must decide what form of business entity to establish.

• Your form of business determines which income tax return form you have to file.

• The most common forms of business are: – Sole Proprietorships – Partnerships – Corporations – S Corporations – Limited Liability Company (LLC) 

Sole Proprietorship

• A business owned by one person (the proprietor). The most simple type of business organization.

• Many use the d.b.a. (doing business as) designation.– Example:

– John Smith, dba Smitty’s Mower Repair

Sole Proprietor Taxes

• Business income is reported to the IRS annually on a schedule C under the owner’s social security number.

• You must pay estimated taxes quarterly to Virginia and the IRS

Sole Proprietor

• There is no liability protection – if the business is sued – the owner is personally sued.

• The higher the risk of injury in the job, the riskier this is as a business entity.

• Example: A new employee slips when mowing and cuts off his toes. He says he was not properly trained. He sues the owner for damages.

• If the business is not worth the damage amount, the owner is responsible for payment.

Other Types of Business Entities

• Partnership – Just like a Sole Proprietor with more than one owner.– Income reported on personal income tax –

divided according to partner interest.– Percentages established by contract.

– Examples• 50/50: divide all income evenly• 90/10: 90% to operator, 10% to silent investor

– No liability protection – if the business is sued, all partners can lose private assets

Corporations

• LLC (Limited Liability Corporation)– Taxes either as a individual or corporation– Personal assets are safe from lawsuits– Easy to establish

• Apply with the State Corporation Commission

– Need to have Corporate By-laws

• Corporation (C or S Corp)– Taxed as a corporation and as individual– Personal assets are safe– Complicated to set-up – need legal help

Bonding

• A surety bond is something that is necessary for starting a landscaping business

• Many clients will require that you are bonded before you begin work.

• Bonding means that a third-party entity has guaranteed that you will perform services as required.

• Like insurance for business reputation. • This is a serious legal consideration because if you

aren't bonded and you fail to complete a project, you might wind up on the wrong end of a lawsuit.

Types of landscaping businesses

• Installation– Sub for general contractors

• Commercial – Installation– Maintenance

• Residential– Installation– Maintenance

• Interiorscape - growing area

Interiorscaping

• The practice of designing, arranging, and caring for living plants in enclosed environments

Interiorscaping Firms

• Contract for design, installation & maintenance of interior gardens for hotels, conference centers, shopping malls

• Provide structure, lighting, & plumbing

Landscape Specialties

1. Xeriscapes – drought resistance

2. Native Landscapes3. Sustainable Landscapes4. Heritage Gardens5. Tree Care6. Lawn Care7. Sports Turf8. Rooftop Gardens9. Outdoor Lighting10.Patios & Barbecues11.Playgrounds12.Water Features

• Niche Markets – specialty areas

• Helps small companies to compete with large ones.