Category Archives: Striping Business Startup Articles

Parking lot business / company startup articles. Financing, marketing, new and used striping equipment, business plans and other articles.

Finalizing Your Funding Needs

I have compiled a list of the basic equipment that you will need to stripe an average parking lot along with the approximate price. I have also estimated basic operating expenses for three months and an amount to set aside for labor costs. These are only estimates and may or may not apply to your situation.

1. Sealcoating machine – $2,500 – $20,000 (can also be applied manually with no equip.)
2. Striping Machine – $600 – $6,000 (see our articles on striping machines)
3. Trailer – $600 (get at least a 5 x 8 trailer)
4. Blower – $50 – $500 (hand blower vs. rolling blower)
5. Traffic cones – $5 – $15 each (you need from 6 – 10 cones)
6. Stencils – $100 (see “making your own stencils”)
7. Rollers, brushes, paint trays, measuring tape, angle tool, black spray paint, marking paint or crayon, roll of rope for making long straight lines – $200
8. An inventory of striping paint (white, yellow & blue). You can count on having to keep about $800-$1000 in paint always on hand. You will also need an inventory of sealcoat. One hundred gallons if you are doing mostly small jobs and five hundred gallons if you are handling larger jobs. ($200 – $700)
9. You will need approximately $500 to cover initial insurance, your business license and basic office related bills for three months.
10. If you pay a helper you will need to set aside enough money to pay them until you get paid. $500 should be enough.

Minimum estimated amount of initial capital needed – $3,000 *

If you already have some of the items above your startup costs would be less. The main goal is to make sure you have sufficient cash in the bank to fund your business until you can generate a positive cash-flow. Remember that running out of cash often means going out of business. Planning ahead can prevent this.

To see more of our parking lot striping articles CLICK HERE.

Estimating Your Funding Needs – Intro

Once you have formed your company and gotten your permits and licenses, you are going to need to establish how much money you will need in the bank to fund operations.

Having adequate financial resources to fund your business can make a difference in your companies success or failure. Few mistakes are more devastating to a new business than making unrealistic assumptions about finances and the capital needs of a growing company. Simply planning ahead can help you avoid these problems.

Before funding your striping business you will need to identify all potential start-up costs. Some of these expenses will be one-time “start-up” costs such as equipment acquisition, incorporation fees, deposits, permits and licenses, etc.. These are generally non recurring costs. Some will be ongoing such as the cost of utilities, inventory, accounting fees, etc.. These expenses will be recurring and will initially need to be paid from start-up capital until the business has a positive cash flow. The goal is to establish how much money you are going to need in a checking account to fund start-up costs until business profits can take over.

Your ongoing expenses will fall into two categories, fixed and variable. Simply put, fixed costs stay the same regardless of the number of striping jobs you have going. Your telephone, power, or accounting bill is an example of this. If you were to have no striping jobs for a year you would still pay these bills. Variable costs will vary according to job volume. Paint, gas, and labor costs would be examples of this. As your job volume increases so do these costs. Keeping this in mind will assist you in setting aside enough money to accommodate growth.

As stated above, as your company grows, so does the need for working capital. Working capital is simply the amount of money that is needed in inventory and in the bank to pay bills. For example, a small striping company may need $5,000 in the bank and $1,000 in paint inventory. As that company grows it would need to increase both of these items. If a company shrinks it would require less. Oftentimes business owners are confused because they expand sales only to find that their profit is being absorbed into working capital to support the growth. Additional capital expenses, such as equipment, will also absorb profits. The thing to remember is that as growth levels out cash-flow will return to normal.

A simple way to understand how profit can go up and cash can go down is to look at a typical series of jobs. Let’s say you start a $5,000 job. You purchase paint, spend money on gas and pay your helpers. You finish the job and send then invoice to the customer. At this point you have made a profit but you actually have less cash. Let’s say that in the meantime you start three more jobs. A week goes by and the check for the first job comes in the mail. However, you have already invested the profit from the first job into the three new jobs so there is nothing left for you. After three weeks the new jobs are done and you have plenty of cash in the bank. Then you get more jobs and you have to purchase an extra striper. Also, you need to leave more cash in the bank to cover growing inventory demand. Cash goes down and you still have not taken a paycheck. This seems alarming, but it is actually a good thing. Business will eventually level out and since you have reinvested your profit back into the business you now have the capacity to take on several jobs with no need for additional capital. Finally, you can start taking a salary and draws. Think of it as walking up steps. Each step takes an effort but leaves you higher than before.

After you have considered all these things, simply make a list of your equipment needs and costs and add a few months of operational bills to that. Put together the funds necessary to cover all of these expenses and deposit them into your commercial bank account. This money is for your business and not for you to live on. You should have money for that somewhere else.

To see more of our parking lot striping articles CLICK HERE.

Obtaining Licenses & Permits

Almost all businesses are required to obtain a business license or permit to do business in the county they are in. Some businesses and occupations are required to be licensed by the state as well. Begin by checking with your county business license office to see what licenses you will need. If you are within the boundaries of a city your will most likely need a city and county license. You will sometimes need a license for each county or city that you will be doing business in. Begin with your own county and as you get jobs out of your area obtain the proper licenses. If you know you will be doing jobs in an adjacent city or county it is a good idea to go ahead and get the proper licenses ahead of time. A license will usually run about $25 per year and once you get one you will receive a renewal form annually so you won’t have to remember to renew each year.

In some states and counties an additional contractors license is required. This is rare but you will run across this in a few places. If you are required to get this additional license it is not the end of the world. Look at it this way. A lot of your competition will not want to study for a test and pay an extra fee for the contractors license. That leaves you with less competition and the ability to demand higher prices for your work. In the end it can actually work to your advantage.

When you get your license, you should probably go ahead and apply with the state for your Tax ID number if your state requires that. If services are taxed in your state you will need that number to file a return each quarter or each month. If you are a Sub S Corporation or an LLC doing business under S Corp regulations then you will definitely need a Federal Employee Identification Number or FEIN. This is basically a social security number for your business. Easy to get and used when you pay yourself and once a year during taxes.

To see more of our parking lot striping articles CLICK HERE.

Creating a Business Plan

A good business plan is like a good map or navigation system. It can help you get where you want to go. It can also help you focus on important subjects that must be addressed if your business is to thrive and grow. It is a blueprint that will help you visually layout your strategy for success and make changes on paper rather than in real life. A good business plan should accomplish most of the following:

-A good business plan gives you a clear path to follow. It can help you make your business what you want it to be.
-A good business plan can be a communication vehicle for your employees and future customers. It can establish your vision for the company and will allow you to measure your success using your plan as a benchmark.
-A good business plan can help you grow as a manager by helping you to focus on your competition and opportunities. It will force you to change your way of thinking from that of a common man to that of a business man.
-A good business plan provides your banker or investors with insight into your goals and objectives.
-Above all, the business plan is a strategy which prepares you to manage your business, rather than allowing your business to manage you.
-A successful business plan is realistic, factual and objective, presenting your goals in measurable and attainable terms.

A Business plan can take many forms and will vary in length, but all successful plans
communicate the following information clearly and concisely:

-The nature of your business (what service is your company going to provide)
-The goals and objectives of your business. (where do you want to be in 5 years)
-The steps you will take to achieve your goals and objectives
-An action plan for implementing these steps
-Major potential problems and strategies for overcoming these problems
-An effective business plan also answers a variety of specific questions, such as:
-Who are the potential customers for your product or service?
-Why will they purchase the product or service for you?
-What is your marketing plan and how will you implement it?
-Who are your principal competitors? What are their strengths and
-What management skills do you lack or are weak? Where will you obtain these
skills or compensate for them?
-What are the current financial resources of your company?
-What is the projected financial condition of your company over time!?

There is no one “correct” format for a business plan, although most effective business plans include the same critical information. More important than a specific format, however, is the presentation of your ideas in a clear and concise manner. This is one step that you may not want to take but not creating a business plan is like leaving on a trip with no map, no compass and no directions. You simply cannot know where you will end up.

To see more of our parking lot striping articles CLICK HERE.

Choosing a Name

Once you have decided to start a parking lot striping company and have chosen the form of business you will use, you will want to choose a name for your company. Your company name should make it clear what you do, should be easy to remember, and should sound professional. Long, complicated names are often hindrances to your business’s success. It is also important to keep in mind that most listings are alphabetical. Therefore, if you choose a name like “Zorro’s Striping”, you will always be last on the list. If you choose “AAA Stripe & Seal”, you will always be first. Search the internet for striping company names. If you are in Florida and someone is California has a name you like you can most likely use it because you are in different states.

If you are forming a corporation, you can visit your State’s division of corporations on the internet and see if the name you want is available. If an online search is not available you can call them. If you are forming a sole proprietorship or partnership you will need to check with your county clerk about filing for a fictitious name. One rule of thumb for most states and counties is that if you use your own name and then “striping company” you do not have to file for a fictitious name since that is your legal name already. Check with your local business license office to be sure. Whatever you pick, make sure you like it because it is an inconvenience to have to change it later.

Here are some good names that I have seen over the years:

Stripe Right
Pro Stripe
True Line Striping
Stripe Masters
Stripe a Lot
Quality Striping
Pavement Pros
Affordable Line Striping

That is just a few. Good luck with your business.

To see more of our parking lot striping articles CLICK HERE.

Choosing Your Form Of Business

Forms of Business

One of the first decisions that a business owner must make is what form of business will be used for the company. There are 4 basic forms of business to choose from. They are as follows:

* Sole Proprietorship
* Partnership
* Sub S Corporation
* Limited Liability Company (LLC)

Sole Proprietorships

Most small businesses start out as sole proprietorships. Mainly because it is so simple to form. You basically need a business license and a checking account. This form of business has one owner who makes all decisions and is personally responsible for all the liabilities of the company. They own all the assets of the business and receive all the profits generated. In the eyes of the government the owner and the company are one in the same.

The advantages of a sole proprietorship are numerous. First, this is the easiest form of business to organize. No attorney or accountant is needed. You share control and profits with no one. Taxes are relatively simple. A schedule C is filed along with your personal return. Most tax programs include this at no additional charge. If you wish to dissolve the company it is fairly easy and straight forward to do.

The disadvantages of a sole proprietorship are numerous as well. All of the liability of the company falls on the owner personally. In other words if the business incurred a liability from a lawsuit the owner would be personally liable. (a liability insurance policy can help cover this) Some benefits like health insurance are not fully deductible. Also, you will have to pay social security on all the companies profits. In other words there are some tax disadvantages. On the other hand, you can deduct some expenses that you would not normally be able to deduct and get your profit down for tax purposes. Lastly, a sole proprietor will generally be taken less seriously than an incorporated business or an LLC. Borrowing money may be more difficult because of this. Also, audits by the IRS may be a little more frequent for this form of business.


In a Partnership, two or more people share ownership of a single business. Like proprietorships, the law considers the business and the owners as the same. In this form of business there will be a partnership agreement which will spell out all the terms of the partnership including who makes decisions, how profits are divided, buyout provisions, etc… Because you now have two or more people involved the paper work and upfront planning is multiplied. Getting an attorney involved would for this type of business probably be a good idea. Like marriages, partnerships tend to develop problems and everything should be agreed upon and written down ahead of time.

The advantages of a partnership are similar to a sole proprietorship. Additionally, more capital can be raised with a partnership and more expertise will be present in the business. Profits flow directly to the partner’s tax returns.

Disadvantages are the same as a proprietorship but also include lack of control by any one partner, liability for one partner because of the actions of another partner and the possible dissolution of the partnership if one partner passes away. Also, having to share profits is another disadvantage.

Disadvantages of a Partnership
-Partners are jointly and individually liable for the actions of the other partners.
-Profits must be shared with others.
-Since decisions are shared, disagreements can occur.
-Some employee benefits are not deductible from business income on tax returns.
-The partnership may have a limited life; it may end upon the withdrawal or death of a partner.

-General Partnership – Partners divide responsibility for management and liability as well as profit or loss according to their partnership agreement. Everything is equal unless otherwise stated.
-Limited Partnership – Limited means that most of the partners have limited liability. This type of partnership is generally not used for standard business. More for short term projects where someone is looking for investors. Forming a limited partnership is more complex than a general partnership.
-Joint Venture – Like a general partnership, but it is clearly for a limited period of time and / or a single project.

Subchapter S Corporations

A corporation chartered by the state in which it is headquartered is considered by law to be a unique entity, separate and apart from those who own it. A corporation can be taxed separately from its owners. It is liable for itself and can be sued and can enter into contractual agreements. The owners of a corporation are its shareholders. The corporation has a perpetual life until dissolved and does not cease to exist when ownership changes.

A Sub S Corporation is actually a tax election only and is done through the IRS . This election enables the shareholder to treat the earnings and profits as distributions and have them pass through directly to their personal tax return much like a proprietorship or partnership. People prefer this type of ownership because of limited liability personally and tax savings. The shareholder is not personally liable for what the corporation does. However, in the case of negligence there would be no protection for the individual who was negligent. To further explain this liability shield assume an employee borrows a company car and injures someone while they are drunk. The employee would be personally liable since they were negligent and were driving. Secondly, the corporation would be liable since it owned the car. But lastly, the shareholders of the company would not be personally liable for the event. As far as taxation goes a shareholder can take a fair salary and take the rest of earnings in the form of a draw. If the salary was fair and reasonable they can save social security on the draw portion. If it is not reasonable the IRS can make the shareholder pay social security on all earnings and even go back to previous years. The general rule is to pay yourself a fair salary before you take draws.

Limited Liability Company (LLC)

The LLC is a relatively new type of business structure that is now available in most states. It is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. Formation is more complicated than a general partnership or sole proprietorship but easier than a Sub S corporation.

The owners are members, and the duration of the LLC is normally decided when the organizational documents are filed. LLCs must not have more than two of the four characteristics that define corporations: Limited liability to the extent of assets, continuity of life, centralization of management, and free transferability of ownership interests. If the company has more than two it must file as a corporation.

Before you decide on the business form you will use you should sit down with your accountant and discuss all of the facts and how they will affect you. Once a business form is elected it is difficult to undo.

In closing I will say that most people choose either an S Corporation or an LLC for a parking lot striping company. Mainly for the liability limits and the tax advantages. Also, with a corporation you will almost always have a separate name which you can choose. When you sell the business you simply transfer your shares to another person and you are done.

To see more of our parking lot striping articles CLICK HERE.