In the previous articles, we’ve looked at planning a landscape design business from a research perspective – gaining knowledge and finding your competitive edge. Now, you will need to take action. This article will provide a step by step guide to registering your business, checking licensing requirements, and calculating startup costs for your new landscape design business.
Checking The Availability of Your Company Name
The first critical step in creating your professional business entity is developing your company name. There are many resources and guides available throughout the internet that can assist you in brainstorming a name for your new company; however, many landscape designers usually just utilize their own name as the name of their company – for example, Christopher Tuccio Landscape Design. There are several benefits to doing this, which we will see as we progress, but you may decide to choose another more unique name for your company.
My advice for developing your company name would be to think broadly and not attach the name to the specific niche you had identified in your analyses. For example, if you were to specialize in vegetable gardens, I would not advise choosing a name such as “Vegetablescapes” or “Fruitful Design”. The reason for this is based on the future expansion and flexibility of your company. You might find several years from now that the most profitable projects for your company have no relationship to the specific niche in which you originally started , yet your company name hasn’t changed. This might hinder your growth.
So choose a company name that is a bit more generic or broad, but ensure your mission is clear and your customers recognize your specialty. This will prevent you from becoming locked in to a poorly developed name if your company moves to a different sector of the industry.
Once you have finalized a good name for your company, the next step is to check the availability of that name to ensure no other businesses within your state are already registered under it. (This is also a benefit of using your personal name within the company name, as it is highly unlikely that you will find a duplicate.) To check the availability of your company name, you can simply check online through your Secretary of State’s web portal, or use a national online service such as this.
You also want to ensure you are checking website domain availability during this process as well. Having a professional website is critical when marketing your landscape design services to clients – something I cover in this article – therefore, you want to make sure your company name is available to be used as your website name (i.e. tucciodesigns.com). If your company name is different than your website domain name, it can be very confusing to clients and may affect your bottom line. To check availability, you can quickly run a search using an online service such as this.
Registering Your Company With State and Federal Governments
The first step in registering your business is to register the business through your state’s Secretary of State. Some state offices allow registration to be completed online. (For state filing, the standard business structures would be a Limited Liability Corporation or Partnership). Since a large proportion of your income and most likely your own physical presence is located within the specific state you are completing work in, State filing is a requirement. To check the requirements for your specific state, you can check their Secretary of State’s website.
Landscape Design companies should also register with the federal government in order to obtain an EIN (Employee Identification Number, also known as Federal Tax ID Number). The EIN is necessary in order to open a business bank account, hire employees, pay taxes, purchase wholesale material, and apply for licenses/permits. The process for completing an EIN is very simple and can be completed online here. Just follow the IRS on-screen prompts to complete the application.
In specialized circumstances, you may wish to register your business name as a Trademark. This is not very common for landscape designers and should only be done after you’ve already registered your EIN with the federal government. The reason to register a trademark is if your company’s name, product, or service is widely known (nationally) and you do not wish others to market or utilize that trade name for themselves. I would not advise registering a trademark unless you are completing work in several states. If you feel it necessary to trademark your business name, you will need to complete the application through the U.S. Patent and Trademark Office.
Finally, in the chance that you decided to create your company as a full-scale S-Corporation, rather than an LLC, you will need to complete Form 2553 in order to register. This process is much more detailed and laborious than the filing of an LLC so be mindful of the differences. If you haven’t already read the previous article on legal structures for landscape businesses, be sure to review it here.
Professional Licensing Requirements
The next consideration for beginning your business will be to identify the specific licenses needed to advertise your work as a landscape designer, landscape architect, or landscape contractor.
The easiest to figure out is Landscape Architect. The landscape architecture licensing process is a national program run through state licensing boards in association with an organization named CLARB (Council of Landscape Architectural Registration Board). The licensing requirements will vary a bit from state to state, but most require a Bachelor’s degree or Master’s Degree in Landscape Architecture along with work experience, and the successful completion of the Landscape Architecture Registration Examination (LARE). Information specific to your state and the registration process can be found through the CLARB website.
For Landscape Designers, the licensing requirements are much more vague. I will define the term “landscape designer” as an individual that designs and builds gardens, patios, walkways, and other non-engineered improvements for residential or commercial clients. For these individuals, most states do not require a specific “Landscape Designer” license; however, some may require other specialty licenses which cover similar areas.
If you are unsure as to the requirements of your state, please review my previous article on becoming a professional landscape designer, and also contact your selected municipality or state office. This is especially important for those business owners who wish to conduct landscape maintenance services which may include the use of restricted pesticides.
Setting Up Separate Financial Accounts & Identifying Startup Costs
The next step when finalizing your business is to ensure you are keeping track of all expenses, invoices, and revenue separately from your personal bank accounts. Not only will this be helpful for you during tax season, but it will also be essential if/when you run into liability issues with your company. Even if you are a sole proprietor just starting out, it is a good habit to separate and itemize all of the expenses for your business. This does not need to be a fancy or professional document in the beginning – a simple excel spreadsheet can do the trick. Once you have a steady stream of income that necessitates a more specialized product, you can switch to a business-specific product like QuickBooks.
The last and final step in finalizing your business is to identify the costs associated with starting your business. Landscape businesses can have a wide variety of startup cost estimates ranging from the hundreds to the thousands of dollars. These estimates highly depend on your overall business goals, the services you provide, and your existing financial stability. A sole-proprietor landscape designer that is simply hand-drawing client projects will have a much lower startup cost than a landscape maintenance LLC that needs to purchase trucks, mowers, and tools.
Small business loans are available for those individuals that do not have the available resources to purchase large equipment for their company. The purpose of these loans is to allow you to get the tools you need to service your customers while you pay off the loan to the bank or lender. For new businesses less than 6-8 months old, I would highly advise NOT obtaining a small business loan.
It might seem like a win/win situation and that you will surely pay off the loan interest quickly; however, many new businesses fail within their first year due to poor planning, loss of interest, or life changing event. You do not want to be in a situation where you need to close your business down while also carrying the burden of an expensive loan. I would advise waiting until you have found a stable profitable stream of customers/projects and you can reasonably project that the new equipment will assist in your current project inventory or help in obtaining new jobs.
When developing your itemized list of starting expenses, be sure to remember to include a marketing budget as well. Many new business owners do not budget appropriately for initial marketing. Even if it is only referral work that you are seeking to obtain, you should still provide a small marketing budget for yourself.
Once you have finalized the registration of your business and identified startup costs, you are officially running a business! In the next article, we will review some marketing tips to obtain a client base and a steady income stream. If you haven’t already viewed the previous articles in this series, be sure to check them out here.