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Looking for Guidance

Discussion in 'Introduce Yourself to the Community' started by wildbl1500, Nov 23, 2009.

  1. wildbl1500

    wildbl1500 Senior Member
    Messages: 111

    I haven't really been able to find the info I am looking for to help me make a decision.

    I have been plowing family & friend's driveways for the last 9 years or so. I have been considering making it an "official" business. I don't have any insurance other than full coverage on my truck. My wife asked someone in the insurance division at her work about "if" i was to plow for money how much would the insurance cost- she got a very unprofessional answer of "oh its expensive" and that I would have to get commercial plates on my truck. I have talked with a friend of mine and he said there are some additional regulations if you have commercial plates- such as you need a fire extinguisher and you can't have any alcohol in the vehicle (i am not a big drinker, but we take the truck on camping and snowmobiling trips). So, I am at a crossroads.

    On one hand I would like to do everything right- become a business, have commercial plates on the truck, claim my plowing income, and have insurance to cover anything that may happen.

    On the other hand, I have 3 or 4 paying customers (plus a couple family members) to do every season (making less than a grand per season), a solid plow setup, and no money going out for expensive insurance.

    I want to get more customers over the next few years, buy a spreader and grow this moonlighting business. The two questions are do I roll the dice and not worry about the insurance and taxes until I actually make some real money or do I get insurance and cut into my minimal profit?

    If I go the legal (safe) route, how do I go about becoming an LLC or other type of corporation to cover my personal liability? How much does your insurance run you? How do I handle using the plow truck to haul the sleds, boat, going camping or to the dump? Are there really extra requirements for commercial plates?

    Any words of wisdom?
     
    Last edited: Nov 24, 2009
  2. Premier

    Premier Senior Member
    Messages: 274

    from what you have stated above, i would get your commercial policy. as far as pricing goes on that it will depend on your equiptment, we run a full landscape co w/mowing ect. firewood distribution and logging opperations and then snow plowing, we pay 330 a month for our commercial auto and our contractor ins. workers comp is extra over that not to sure what the numbers are. if you are a solo opp, you shouldnt need workers comp, the cost will kill you being it is based on the co. gross income. I should note, we have many peices of equiptment that have there own policies on them which helps keep our costs down, example, our 92 chevy, 110 a month for full coverage, or 32 a month liability only then we took out a policy on the snow plow for 10 a month and the dump insert for 15 a month. if the truck gets totaled we have the important things covered and with what we have saved over the last 5 yrs will more than pay for a newer truck.

    i would talk to a lawyer about getting some form of incorporation, be it llc, s corp. something to protect your a$$, call the dot down in dc get your free DOT number. I dont think you need commercial plates, on your truck (but check with your local DMV) a simple call will get that answered for you. Best of luck in your decision making.

    Note on the insurance end of things. once you get into/if you get into commercial properties most will want a 1 million policy, from what i have seen its not that much more than a 500K policy imo just get the more coverage right off the start, then you are covered.
     
  3. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Read my response in this thread and see if it helps you.

    http://www.plowsite.com/showthread.php?t=87947&highlight=Mick

    "...roll the dice and not worry about the insurance and taxes until I actually make some real money or do I get insurance and cut into my minimal profit? Only if you can afford it. Legally, you'll be uninsured and "evading taxes", which the IRS frowns on.
     
  4. Eyesell

    Eyesell 2000 Club Member
    Messages: 2,101

    Just read it Mick, good info buddy !
     
  5. hydro_37

    hydro_37 PlowSite Veteran
    from iowa
    Messages: 3,790

    Talk to an attorney, a reputable insurance agent and the DOT and then make a decision.
     
  6. triadpm

    triadpm Member
    from 21771
    Messages: 48

    You only need a DOT# if your GVW is 10,001 pounds or over.
     
  7. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    if you are going to do this as a buisness, do you have additional clients lined up already, or potential clients? i am going to get my @ss handed to me for saying this, but if you are just doing it to stay "legit" with 4 "customers" which are friends and neighbors, i wouldn't worry about it too much. If you are going to pursue many customers (and customers that are strangers) then get your buisness license and insurance etc. and claim the extra income on your taxes, (you don't need your buisness license to do that) you aren't plowing as a buisness you are helping out your neighbors with your neighbors understanding that if there was a slip and fall that you aren't going to cover it. AND if you are going to get into commercial contracts (friends or not) get your insurance and commercial plates etc, it isn't worth the risk. OKAY guys, i am ready for the verbal whipping i am about to take.
     
  8. Plowtoy

    Plowtoy Senior Member
    Messages: 929

    By the sound of it you intend on being a "small business" There is no need to Inc. or LLC unless your worth millions. You can run your business as a DBA, open a checking account for it, and file taxes correctly just running "Doing Business As". As for insurance, you can never have enough, talk to your insurance person, let them know what your plans are and they can provide the proper ins. Some accounts will require you to name them on your policy but thats not a big deal. Plowing insurance is a must. Good Luck:waving:
     
  9. wildbl1500

    wildbl1500 Senior Member
    Messages: 111

    Thanks for the info guys, especially that insurance info Mick.

    Buckwheat hit it on the head. Currently, i don't make enough money from my very few paying customers to pay out the $1000 or whatever yearly for insurance. I just feel I have been lucky and I want to cover my a$$. I don't see that I will be able to add too many customers for a few years- until I am not in a rotating, 12 hour shift production position. No commercial accounts are in my future, and this will remain a one truck, one driver endeavor.

    i am planning on getting a real, factual, quote on the insurance. As for the IRS, like I mentioned I only had $670 in income from plowing last season...
     
  10. Plowtoy

    Plowtoy Senior Member
    Messages: 929

    Wildbill, I would consider claiming the income, than you would be able to "write off" some of your expenses, including, fuel, truck (or payment), insurance, and repair or maintenance bills. I claim everything, its not worth dealing with the IRS even if it is only $700 a season payup
     
  11. wildbl1500

    wildbl1500 Senior Member
    Messages: 111

    A little update...

    I finally got a real quote for the insurance. Putting my truck on a commercial policy is only going to cost me about $130 more per year than I pay right now. The agent suggested not worrying about the "slip & fall" coverage just yet, as I only have about 5 paying customers and all are friends and family. As I grow my customer base over the next few years I will go in that direction.

    On a side note, I also have learned a little about the State of Maine's motor vehicle laws. We have a 4 place enclosed snowmobile trailer and with 4 sleds and 4 people in the cab I am very close, if not over the 10k weight limit for passenger car plates. So, I spent the $27 and ordered commercial plates online.
     
  12. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Think twice about that agent's "advice". It's not the "friends and family" who will sue you. Their or their visitor's insurance company will do that to recoup any cost of claims paid. One judgment involving a medical bill for a broken arm could ruin you. The only way around it would be if you or the "friend or family" paid the medical bill out of your pocket. Even then you might get hit with "pain and suffering".
     
  13. andcon83

    andcon83 Senior Member
    Messages: 388

    Just registered my truck a few weeks ago...the difference in a passenger car plate and a commercial vehical registered to 10,000lbs....$2. Couldn't believe it.