Landscape Management

Abstract

Joe operates a successful commercial landscaping and tree trimming business, and client's keeps his operation extremely busy. Although Joe employees at least 50 workers, with landscaping being seasonal, he experiences a high turnover. In addition to landscaping and tree trimming, equipment rental is also available to the clients, which adds an additional division to the business. With $250,000 of capital, and past year's revenues of $500,000, Joe is looking for guidance to take his business to the next level.

Research was conducted using the University of Phoenix online library, the course textbook, and online periodicals and materials. Using the information above, a proper entity selection, vision for the business, identification of legal and regulatory issues, and selection of business professionals will be identified to help the landscaping business take the necessary steps for furthered success. For simplicity, the business will be called LandScaping Unlimited (LSU).

Landscape Management

Joseph Smith is owner and operator of LandScaping Unlimited (LSU), a successful lawn care and tree trimming business. In addition, LSU offers equipment rental to its clients. However, since the nature of the landscaping business is seasonal, the company is interested in expanding into snow removal, and interiorscaping, making it a year-round operation. The goal is to offset the fixed costs the landscaping business incurs in the winter months, thereby increasing the overall profitability of the company.

Entity Selection

Every single fact concerning the business is relevant to the choice of entity decision. Not all of them are of equal importance, but they all matter to some degree. The considerations that should be in the forefront are not the sale of ownership interests to the public, or venture capital financing--these things come later (hopefully!). Instead, the initial focus should be on:

* the tax and tort liability issues,

* cost of maintenance of the entity,

* protection of intellectual property (very important and often overlooked),

* size and complexity of the entity,

* regulatory requirements that the local, state or federal government has placed on the proposed business activity,

* and other similarly mundane issues (Entrepreneur's, 2004).

Being the owner of LSU, Joe probably operates as a sole proprietor. It is recommended that the business change its entity selection to limited liability company (LLC). The main advantages to an LLC are the protection the LLC owners receive from business creditors, and the fact that the owners can still participate in the management of the business. The LLC is often attractive to entrepreneurs because they can retain control of the business by acting as the manager or controlling member while still being able to enjoy the tax benefits of a tax flow-through entity. It is rapidly becoming the preferred entity over limited partnerships and S-Corporations (both of which provide similar tax benefits) because the LLC does not need a general partner and does not require the legal (i.e., costly) "maintenance" associated with an S-Corporation (Lodgix, 2004). The LLC is recommended for LSU because of the limits on liability, tax benefits, and control. Control of the business is crucial in the event additional owners, or managers are acquired.

Legal and Regulatory Issues

In modifying LSU, several legal and regulatory issues must be considered. All local, state, and federal laws must be upheld. Landscape Management (July 2004) tells us of the top ten issues affecting the landscaping business. They are the H-2B cap, gas prices, water shortages, emerald ash borer (EAB), the "do not call" list, phosphorus bans, activists and pesticides, sudden oak syndrome, neighbor notification, and emissions regulations.

The H-2B nonimmigrant work visa provides a method for US employers and agents to obtain the services of foreign nationals to fill temporary needs for additional workers. The length of the stay on an H-2B visa is limited by the duration of the employer's temporary need for additional workers. The maximum authorized period of stay is one year, and the visa may be extended for a total of three years. However, extension applications are closely scrutinized. One of the most significant restrictions on the H-2B category is the requirement that the need for the foreign worker is temporary. The Department of Labor recognizes four situations in which there is a temporary need for workers: recurring seasonal need, intermittent need, peak-load need, and need based on a one-time occurrence. Not only must the employer promise to employ the worker for a limited period of time, but also the employer must verify that its need for the worker is temporary (Siskind, 2004). Many landscape businesses employee temporary/seasonal immigrant workers so this is especially important. Those people found to extend the cap are sought out by United States immigration agents and deported.

We all know oil and water do not mix, but they are especially important elements of a landscaping business. Due to ravenous global demand, and petroleum producers' reluctance to boost supplies, the price of oil is likely to remain high (Associated Press, 2004). As the demand for water increases with the burgeoning worldwide population and droughts become more and more frequent, landscapers will eventually have to face the music and change their ways. The 21st Century Water Commission Act of 2003 seeks to project future water supply and demand, find ways to increase water supplies, and develop other water strategies with water agencies and entities. Whether it is having to install more water-friendly landscaping on customers' properties, or add more services to make up for a loss in revenue, the landscaping industry will have to change (Landscape Management, 2004).

Other impacts on the landscape industry include emerald ash borer (EAB), phosphorus, pesticides, sudden oak death syndrome, neighbor notification, emissions regulations, and the "do not call" list.

* Ash is a common street tree, often representing 5-20% of all street trees in many mid-western and Canadian cities. The potential loss of ash as an urban street tree greatly reduces the selection of suitable species available to homeowners and municipalities, and could contribute to urban