Business Operations and Financial Management
Structure and compliance
Choose and register an entity, obtain the LCB business license, and maintain the bond, general liability, and workers' compensation coverage. Oregon requires workers' compensation for employees, and public works projects trigger BOLI prevailing wage and certified payroll obligations. Oregon has no general sales tax, so bids hinge on income and excise taxes, payroll burden, and equipment costs rather than sales tax add-ons.
Know the numbers
Separate cost of goods sold (materials, direct labor, equipment on the job, subcontractors) from overhead (office, insurance, marketing, owner salary, trucks). Gross margin is what remains after COGS; net profit is what remains after overhead. Markup and margin are not the same, and this is the most common computational trap on the exam.
Worked example
A job costs 8,000 dollars in materials and field labor. To earn a 30 percent gross margin, divide by the complement of the margin: 8,000 / 0.70 = 11,428.57 dollars. Multiplying by 1.30 instead yields 10,400 dollars, which is only a 23 percent margin. Price at 11,429 dollars.
Cash discipline
Job-cost every project, compare estimated to actual hours, bill promptly, and track retainage and receivables. Unbilled change orders and slow collections sink more landscape companies than bad horticulture. Know your lien and notice rights on private work and preserve them by serving required notices on time.
Traps: pricing with markup while believing it is margin, ignoring labor burden, and treating owner draws as profit.