Starting Out - Excavation & Site Work - Contractor Talk

Starting Out

 
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Old 02-26-2015, 10:23 AM   #1
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Starting Out


OK I have a good question. We have a family farm but I am wanting to get into excavation. Would I make an llc from the farm business or just use the farms name and tax id and licenses? What's the best way to start out? I'm sure y'all here this question a lot. But I haven't found the answer yet.
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Old 02-26-2015, 11:01 AM   #2
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Re: Starting Out


Among all the other issues I won't get into I will try and answer your question.
Keep your new business completely separate from the farm.You don't want them connected in any way.
What if you ,for some reason get sued for an issue with the new business or can't make it and own money for some reason.Like the old saying goes,you don't want anybody to be able to'take the farm.' All businesses not directly related to each other should be separate imho.

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Old 02-26-2015, 12:37 PM   #3
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Re: Starting Out


If it's a family farm I would definitely avoid combining the two.
If it's your personal farm I guess you could do whatever you want. If something goes wrong they can probably get you either way. I don't know any laws when it comes from farming, but if I have a GC business and do woodworking on the side for money(as a separate business), and there was a huge suit against the GC business they will most likely be able to come after the woodworking business as well. From my understanding LLC doesn't mean too much when it comes to protecting yourself in a law suit. I could be completely wrong though. Also, there could be special laws that give farms more protection.
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Old 02-26-2015, 01:13 PM   #4
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Re: Starting Out


My advise to you is go work for a company that does excavtion, Its not just digging holes, Its knowing soil swell, soil types, The last thing you need is to dig out the digger and driver, There was a guy round these parts that had a company called "Work n Play" that put you in the seat of all kinds of graders etc.
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Old 02-26-2015, 01:22 PM   #5
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Re: Starting Out


I have worked for a few excavation and have done a few projects of my own. That is kinda where I was going to go with this is to keep them separate. I was just curious due to the fact we have a farmer here that dose both under the same name.
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Old 02-26-2015, 07:35 PM   #6
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Re: Starting Out


You can actually go under the similar name, but make them separate companies.

Example: Johnson Farms Inc. Johnson Farms Excavating LLC

Talk to your accountant and good luck !!
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Old 02-27-2015, 05:50 AM   #7
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Re: Starting Out


I am with you in the same boat. I have been raised in a family business (hydroseeding and some excavating) and this year I decided to break off and start my own business. Here's some things that my insurance agent told me the other day...

Keep all specialized entities separate, for instance, I do demolition on one side of the spectrum , land clearing and ponds on the other side. He suggested to run Gillett Excavating LLC, and Gillett Demolition LLC. That this does is not only if you get sued they in theory don't take both of your entities, so you still have a way to get cash flow, but also General Liability insurance premiums are different per service, and this effects equipment insurance, umbrella, work comp, ect.

Ex: 1mil with 1 million per occurrence for excavating, 1200 a year, the same for demolition is close to 2000 per year, while something like lawn care is 700.

So you don't want to pay demo premiums on GL, Inland Marine, ect, when you are doing ponds. The way you get around that is for demolition you have just GL, and you "Lease" gillett excavating's equipment to gillett demolition.

The main point is I'm sure farming premiums are far off from underground premiums.

Good luck!!
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Old 02-27-2015, 06:56 AM   #8
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Re: Starting Out


That was some good info I'll be setting up a meeting with my insurance agent and figure out the best way to get started.
Thanks yall
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Old 02-27-2015, 07:28 AM   #9
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Re: Starting Out


That's how one of my buddies does it here.they build roadways and bridges.they have a construction company set up and leasing company which leases all of the heavy equipment to the construction company.

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