View Full Version : Tough getting accounts with people!!
03-07-2001, 07:06 PM
We are filling out credit apps with some local places here, nurseries, rental store, mulch distributer etc. etc. its tough when you just start out. They tell me well you have no credit come see us when you get it. Well lol how can i do this if you wont deal with me in the first place i ask? They must understand im a NEW company hehe . I am slowly but surely finding places that are helping me but its not easy!!!
03-07-2001, 07:57 PM
start small with cash-you should be able to get in business for 2500-3500 with used equipment.if you have no money invested,why would anyone trust you to mke good on your loans if things go bad.If your broke-get a job with a lawn care company to get money and experience.Good luck and stay determined-more businesses than not will fail-its a big risk.
[Edited by John DiMartino on 03-08-2001 at 01:09 AM]
03-07-2001, 09:13 PM
If you have some money try borrowing against it with a bank they set it up just like a loan and report it to a credit bureau its a good way to establish business credit, once you pay it off you get your money back.
03-08-2001, 02:17 AM
Try getting a credit card in your business name or DBA along with your name. I like American Express for this.
Try buying 90 day same as cash even if you were going to pay in full at time of purchase.
Try getting a dealer parts card like Snapper, Toro, etc...
Get a Lowes, Home Depot card in your biz name. Usually very easy to do.
Get small 90 day notes from your bank. Start out with what ever they will allow you to borrow. They might ask for collateral, like a car, mower, etc... Do not use the money! Just pay the interest and the loan back in like 30 or 45 days. The more you do that, the more they will loan you each time. Then after a while you can list the bank as a credit reference. They will show you pay in full, on time, and early. It will cost you a few dollars over time, but it is a way to buy credit.
If you have bad credit under your personal name, it will be hard no matter what. But, you can do it if you endevor to persevere.
03-08-2001, 05:08 AM
03-08-2001, 08:42 AM
If you are new in the business, or even been around for a few years or decades, you need to learn how your suppliers survive in their business. Do you need credit to finance the job, then when you are paid, the supplier gets paid? Suppliers are not comfortable being your banker also. Especially when you are new! Does a restaurant give you breakfast so you have the energy to work today, and you will stop by on the way home to pay them?
While many use credit accounts as a form of financing, that is not the reason for them. The real reason is to simplify bookkepping for both parties. I walk in to get a belt, Ed throws one at me, I sign and leave. We don`t waste time on settling up on each transaction, just settle up once a month. But if I buy $2K of equipment on the 15th, I pay him right then for that and account to date that month. He knows I`ll pay - been there 12 yrs - but why should I ask him to finance my major purchase for even 3 wks? He had to pay out $$ or pay financing to have that equipment available to me, and he is not getting rich on commercial sales.
If you are starting out and want credit, go to a supplier who you expect to do $400 a month in business with. Give him a $500 deposit on account, and always pay monthly bills promptly and maintain that credit balance. In 10 yrs, you will need no deposit with him, even if you`re doing 40,000 a month with him. Remember that these suppliers have seen dozens, hundreds of startups over the years, and they know that few of them survive. They cannot afford to gamble if they will be paid.
Now I`m gonna take a nap. Need to be well rested to read Grassmaster`s response here. Think I hear his keyboard clicking all the way from JawJa.
03-08-2001, 09:36 AM
Well i guess im gonna have to wait this one out as far as establishing credit goes. I figured it would take a little while and i totally understand why. Our company is pretty much complete and established, just need to keep up the growing clientele. I was again just frustrated that everything is ready to go except the fact that its somewhat difficult to get a commercial account at these suppliers for my upcoming season. Jim im going to do that though, see if they will just take a 500 account balance from me and pay monthly from there. =)
03-08-2001, 09:46 AM
hey gun i know what your going through i'm only 18 everything is in my name but i have to have my dad sign as a cosigner and its tough you just have to hang in there it only gets better. trust me.
03-08-2001, 11:52 AM
Dealers & Suppliers have got burned so many times & that's the reason they are the way they are? You probably will not cut grass for folks if they owe you 2 months. Will you?
What maybe a couple of hundred dollars? Well that is not even any Money to start with & some folks get upset over such a trivial amount? Be a dealer & see what folks get into you for?
Well if you are a dealer or supplier & you only wait 2 months to get paid well you are very lucky individual. Believe me 6 months wait is nothing?
I don't care if these folks see this post or not. But it is common for Home Depot, Lowes, K-mart, Home Quarters when they were in busines & many others to hold back 6 months easy on me? Yes, I live it all the time. How much Money do you think these folks bring in on a Rainy Weekend, well I tell ya about 1 to 5 times what my business grosses in a year. And they wait 6 months to pay me?
If I got on the phone & called them everytime they are just a few months behind they would not even do business with me.
At one time back before 1995 I had a lot of commercial accounts with Cutters. At Christmas I was carrying over $25,000+ owed to me from December to Janurary? Most of this work was done 6 months before. This is common with the Equipment Dealer& Supplier. That's why they act the way they do!
Can you even Fathom carrying this kind of money a month, on work you have already done at the hardest time of the year? No! You have to live it to know it. Yes there is good Payers out there. LOL, we had a total of over 50 Commercial Cutters, now we weeded out all but good payers, guess what 4 left & we still have 1 bad payer.
He was good as gold for over 6 years now he owes us over $1,400 (he's been owing it for a while) & it hurts when he walked into shop yesterday Wednsday 03/08/01, yes yesterday & bought a $350 trimmer. He payed a check for it & yes we made $70 profit. But the other $1,400 he said he give us $200 on the account next week. Well that's a Joke to start with?
How did we loose all the Commercial Cutters? We told them that they could not charge & run over $500 a month & any repairs over 2 months old on books must be paid by the end of the second month. That's how we lost them, they do business with other shop now that don't give credit, why because they are ashamed of the way they did us? They didn't realize it till they quit us?
I helped a lot of these guys start out, I even went on the job & helped them bid & even write up their contracts for them. They gone now because I wouldn't carry over large amounts owed to me?
What's even worse is this same guy has bought 3 different Vehicles for himself only in the past 2 years, I can't afford to do that. My Truck is 17 years old & I pay my bills every month, because if I don't I'll loose Suppliers, Manufactures & My dealership & I do not understand it? Yes I have to give one of the biggestManufactures out there a finacial Statement every 6 months & they continually check my credit & if I'm late or not a good payer to someone else not even them, they cut me off?
This guy I'm talking about is a one man show, goes on 2 to 3 vacations a year. Every Saturday I have to be at shop & last Saturday was first Saturday open for the year & Between 10:00 & 4:00 I grossed $102.53, 2 people 6 hours of Saturday, no life at all. That's a Joke on me? Yes I'm Stupid, that's what they call us & they are right? This is why this dealer acts the way he does.
I read post on this Forum all the time about folks that owe them for a month or two service & I'm sorry, but I just want to laugh. Because I know how I have been done. I've been burned so many times, there is nothing left to burn. :-)
The Mass Merchants? Well in order for us to get their repair work, we just have to deal with it. Why because when folks call them or drop by & ask who they reccomend well if we are doing business with them they reccomend us? Yes we have to eat plenty of dirt to make money? That's a fact?
Believe me I understand where you are coming from, but you have to understand them TOO! I lost over $45K last year yes out of my pocket. To pay the help & keep the doors open. Last year was the dryiest year we had since I been in business. I'll either sell it, but don't think so been trying that for over 5 years or I will pay it off in a little over 5 years & the month it is payed for I'm having a going out of business sale, then I sell realestate. I will make out good butt I haven't wanted to be there since 1995 but can't go yet.
Probably the best thing to do is get a credit card & if need be you might have to pay in advance on it. Butt after while it will help your credit wise?
I'm not trying to give any of the cutters a hard time, I've been on both sides of the Fence & on this side the Grass is dead as Hades!
I would like to start up a Aeration, Dethatching, Fertilizer & Spraying business one day? I miss the Lawn Service Business & out of 5 other business's it was the Best & most enjoyable! BTW, I've done well on all the other ventures I've had & if I hang in there this one will be the best yet! I bought this dealership for less than the realestate was worth & I will do very good at the end.
All I can say now is I hope we all & I mean everybody everywhere has the best year ever! I'm counting on it dearly!
03-09-2001, 06:37 AM
My Credit 2 cents
1. Do not bury yourself in debt!
2. Local suppliers can't afford to carry me, so I use credit card when needed and..
3. Get 50 percent down payment cash from customers on larger jobs such as mulch and landscape installation.
4. Offer early pre-payment discount to lawn customers to generate cash for season start up.
5. Always be on lookout for best deal on credit cards, the market is competitive IF you pay your bills. American Express is very good for showing you pay bills as well as very handy for buying time to do job, get paid.
6. I use gas cards to purchase all fuel and pay when bill comes in. No interest charged and frees up petty cash as well as improves credit rating.
7. Get a copy of your credit report from one of reporting agencies to find out what is on there. They make mistakes.
We have been in business for a while and we wanted to open up a business account with our bank so we were told to get a DBA with the town then we opened our account up. We have had two truck loans with the bank and paid off early. But before that we got credit from Lesco and our local mulch company without a problem. We also got a Getty gas card for the business so every bit helps. We are a very small landscaping company- two men. Sears usually gives a credit card with just a smile try that too to establish credit. Also, can't phone bills be used as credit too. I think some times they make it harder than it has to be! Good luck.
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