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View Full Version : In regards to the post about spending 14k on startup...


sandman23
04-17-2007, 03:19 PM
Ok tell me this...

I started my business toward the end of last year. I am fully legit (inc., lic., ins., etc...). I still have a full time job but I am looking to hopefully break away by next year.

I have more work than I can handle (part time). I am having to turn work down. Currently I have 12 accounts ranging from $25.00 to $90.00 per cut. Most recently I have picked up an entrance to a sub (800 x 14), a 32000 sq/ft. res., and another 24000 sq/ft. res.

I have about $6,000 invested (used 36" metro hp, new BR600, new FS90 trimmer, used 5x8 trailer and a few other necessities).

With these new accounts I am starting to feel the need for a NEW Z. I tried the USED route and did not fair well. I already have $500.00 in repairs (belts, tires, spindles, etc...) on the Metro. For a few hundred more I could have bought NEW with warranty.

At this point in my venture, does a new Z sound like a warranted purchase? By the way, I am considering a LazerHP 19/46 for $6799.00. Any input will be appreciated.

gravtyklz
04-17-2007, 03:49 PM
There is a formula that can help with decisions like this. Its only to help though, not to be the deciding factor.

Its called the Return On Assets(ROA) ratio.

ROA = Net income/Total assets

By net income you may need to project your current accounts for the whole year to get an accurate number to go off of.

You should get some 0.something number unless your income exceeds your assets. Basically put a $ in front of what you get. and for every dollar of asset you have you are generating that amount of money.

If your net income was $9000 for the year and you had $20,000 in assets than you would have: $0.45 for every dollar in assets. The bigger that number the better off you are.

Theres also a formula for Return On Investment, but it wouldnt be as accurate since the jobs you would do with the ztr could be done with the WB. Could you do more work in the week if you had the ztr? If so then you may be getting some where.

sandman23
04-17-2007, 04:12 PM
Interesting post gravtyklz. These are the parts of business that I believe a lot of people do not pay much attention to and therefore have no idea what their true returns are. I look forward to learning all aspects of running a small business. This site is a great resource.

gravtyklz
04-17-2007, 04:16 PM
the percentage rate is pretty high when it comes to self employed individuals who dont know much about business in general. Most people learn as they go. I have, and still am in a lot of aspects. If you're a reader theres a book series called 'Numbers 101'

Its a very good in general book series.

bohiaa
04-17-2007, 04:26 PM
If you want it and there is a need for it, and you can afford it...

GO GET IT....

it's an envestment.
also shop around. I saved about 1000 on the price of my lazer AS 52"