Surety Bonds: How They Could Legitimize Your Lawn Care Business

When you're looking to establish a clientele for the first time, you might run into a dilemma. You've probably tried going door to door to attract potential customers, and some were probably less than enthused with the idea of a teen tending to their lawn. Basically, some homeowners are afraid that they'll pay an inexperienced teenager who won't be able to provide high quality, professional services.

So what's a good way to boost the legitimacy of your lawn care business? You need to find a way to assure potential customers that you're a reliable individual with the credentials to perform quality work. Purchasing a surety bond could help give you such a boost by proving that you intend to do a good job, and you'll have the financial guarantee of a surety provider to back you up.

Surety bonds basically function as contracts that guarantee the quality of a business's work. There are three parties involved with each bond:

1. the principal who gets the bond (this would be you)
2. the obligee who requires the bond (this would be a government agency)
3. the surety who sells you the bond (this can be a local insurance company or an online nationwide surety bond producer)

Basically, by selling you a bond the surety provides your potential consumers with a financial guarantee that you will perform your work appropriately. If you're able to purchase a bond, you're giving your consumers an additional level of reassurance in case you go against the bond's language and fail to follow industry regulations in some way.

Getting a surety bond will likely only be an option for your lawn care business if you plan to have it officially licensed as a business in the state in which you work. If you're operating the business on your own without officially registering it and paying taxes it won't be recognized as a "legitimate" business in the eyes of the government.

If you're ready to purchase a bond, you should know that each bond executed has a unique surety bond cost that is calculated by taking a number of variables into account, including:

• Industry Regulations: Do you have to purchase a surety bond in a certain amount?
• Location: The surety bond will need to be valid for all areas in which you plan to work. Depending on the bond type and its applicable regulations, this could vary by state, county, or even city.
• Credit Score: To get licensed in your state, you'll need proof of a reasonably good credit score, which means you'll probably need one of your parents to sign as your partner. Otherwise you probably won't have the necessary credit information to get approved for a bond. With a good credit score you'll get a much cheaper price for a bond, and with a low credit score you'll have to pay a much higher fee.

When it comes to your personal lawn care business, it's probably up to you whether or not you want to take advantage of the benefits a surety bond can offer. When making the decision you'll want to weigh the actual financial costs with the potential benefits of attracting new customers and determine which option is best for your business.

This article was written by Kevin Kaiser of Surety Bonds, a nationwide surety bond producer that operates online. Kevin had also been involved with his own successful lawn business in high school. Feel free to leave any questions in the comments or email him at kevin {at} suretybonds {dot} com.

Labels: business