Posted: March 20th, 2017

Business Organization

I started my Lawn Mowing Service as a sole proprietorship. I bought the lawn mover, edge trimmer, gasoline, and rake. I mowed neighbor’s yards. I got all the profits. If I did a bad job, or could not mow because of weather, I took a loss. I was very successful and made a lot of money and had 100 yards to tend every month. But I got tired of mowing 100 yards a month and working between 10 and 12 hour days. I needed help. I asked my parents if they would help and I would pay them half of what I made on each yard they mowed. They said: “No, we want the full amount for each yard mowed. The only way that they would be able to get the full amount is to produce their own yard service tools. If I had to provide them, I did not want to lose money for my material. We agreed to a deal that everything would be 50/50. This is when we formed a partnership. We agreed to 50/50 as they would take half the work and produce half the equipment needed. Even though it was my idea and business, 50/50 is better than no help at all and they are footing half the expenses. With this help, my business was growing faster and we were making money like crazy.
With our business growing, other members of the family wanted in on the action. However, none of them wanted to actually work directly on the business as they had other jobs and did not want to work out in the heat. So, we formed a limited liability company. Each of them put up an investment, and we purchased more lawn service tools and trucks so we could easily move large mowers around town. The investment was also used to advertise the business. With having more customers now, we hired professional people what would do a great job of mowing yards and would be friendly with our customers.
With having more customers, all the investors were paid back their investment and were now making a profit. At this point we were ready to expand our business to include tree service as well as landscaping. We wanted to expand so we could get contracts with the county, city, and state to mow the grass along the highways, interstates, and county roads. To expand our business, we needed a loan. We went to the bank, but they bank said: “No. Your business is too small and you do not have any assets to cover the loan. So, we decided to form a joint-stock company and made the stockholders liable for debts. In other words, we used their houses and or vehicles as collateral. When we went back to the bank they said: “Yes, a loan is no problem. If you don’t make good on the loan we’ll use the collateral to repay the debt. ” With the money we were ready to expand. At the last minute we decided to buy a piece of property and open up our own nursery. This now allowed our customers to come and pick out plants that they would like to see in their landscaping instead of us taking them to a competitor to purchase plants.

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