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Hoss4x4
09-18-2011, 09:13 PM
Who runs a debt free business? How many Years? Any tips?

larryinalabama
09-18-2011, 09:46 PM
This is my 3rd year in business and its all been dept free. I spent 1 year searching and finding good deals on equiptment and my box truck. The only thing I bought new was my mower and I caught a great deal on it during the off season. I figure I could make money on most of my purchases so its all just as good as money in the bank. I also run my personal life debt free.
The key to being debt free is dont borrow money LOL

This business is super expensive to operate and if you borrow money it will surley fail. If your truck never leaves home you want to be as close to zero for the days expensis as you can, their is some insurance and other bs thats unavoidable.

Be pacient and make the homes you service look good, customers dont really care how shiney your truck and mowers are. If you do get a older truck fix al the oil leaks and never park in the customers driveway.

USA Lawn Care
09-18-2011, 09:49 PM
debt free last 2 seasons.
only way I could manage to do it was collecting payment 'as we mow'.
cash flow is always there.
growing the biz back slow and steady but with no debt at all......helps me sleep at night :)

key is to watch what you spend....and only spend when you need to.
shouldn't take long at all to get enough cash to buy what you need.
if you get in a pinch and need more time to buy another mower, have someone else mow a property for you for a month or so until you can pay cash for what you need.
Put it this way......anyone in Joplin, MO that got smashed by the tornados who was running a lawn mowing company and was depending on the upcoming mowing to pay for their equipment, guess what.....banking on tomorrow doesn't always work. Payments are still due. Don't get yourself in that position. When the bottom falls out of your business due to some unforeseen reason, you will be ok if you have no debt.

larryinalabama
09-18-2011, 10:14 PM
debt free last 2 seasons.
only way I could manage to do it was collecting payment 'as we mow'.
cash flow is always there.
growing the biz back slow and steady but with no debt at all......helps me sleep at night :)

key is to watch what you spend....and only spend when you need to.
shouldn't take long at all to get enough cash to buy what you need.
if you get in a pinch and need more time to buy another mower, have someone else mow a property for you for a month or so until you can pay cash for what you need.
Put it this way......anyone in Joplin, MO that got smashed by the tornados who was running a lawn mowing company and was depending on the upcoming mowing to pay for their equipment, guess what.....banking on tomorrow doesn't always work. Payments are still due. Don't get yourself in that position. When the bottom falls out of your business due to some unforeseen reason, you will be ok if you have no debt.

Thats a good post, I used to be accused of living under a rock for these type of comments, that was a few years back and Im not sure if those companies are still on lawnsite.

Puddle of Oil
09-18-2011, 10:26 PM
Their's nothing wrong with debit, just the person using it the wrong way.

lawnkingforever
09-18-2011, 10:35 PM
Debt free here also. I paid off my truck back in the spring and paid cash for my used Grandstand. It was tough spending that
Kind of coin. But without payments or debt you can build the bank accounts back up pretty fast. The only payment I have is my Americanexpress business card which I get 4% cash back on gas. I pay it off every month.
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tlc1994
09-19-2011, 12:55 AM
Debt is dumb. Cash is king. Wait to buy still until you can ACTUALLY afford it. There's plenty of deals the CC companies offer (cashback, way-to-save, etc.) but only because they know they'll get back exponentially in interest. Stick to the Benjamins and you CAN'T get into debt.

fireman gus
09-19-2011, 10:37 AM
Basicly debt free the first 30 years of business, then opportunity came up for a job I felt I couldn't refuse. The total income, with a 2 year signed agreement form gaurantee payment, more than would pay for the larger equipment needed to do the job, so financed new equipment . Paid off in one year so next year should be profit.

joshman108
09-19-2011, 11:08 AM
Its funny, being debt free is good. And I am debt free....
Yet most major companies (multi million/billion) dollar companies HAVE to be in debt to start. Walmart was leveraged to the hilt in the beginning years in order to expand, yet look at it now.

Few big companies can grow without debt. Thats the nature of things. A big company often has enormous start up costs which cant be avoided by starting slow. You often have to jump in head first and hope you come out alright. Debts bad, but it can be necessary (on the big scale).

MowingMowingMowing
09-19-2011, 01:23 PM
Its funny, being debt free is good. And I am debt free....
Yet most major companies (multi million/billion) dollar companies HAVE to be in debt to start. Walmart was leveraged to the hilt in the beginning years in order to expand, yet look at it now.

Few big companies can grow without debt. Thats the nature of things. A big company often has enormous start up costs which cant be avoided by starting slow. You often have to jump in head first and hope you come out alright. Debts bad, but it can be necessary (on the big scale).

Compares Walmart to a lawn care company isn't exactly apples to apples.

I've never had any debt, but then again I'm primarily a maintenance company so all I've had to buy is mowers, trimmers, blowers, a trailer, etc. No need to go into debt for those things.

The way I paid for almost all my equipment was buying people's equipment in the offseason for a deep discount, cleaning them up (changed plugs, greased everything, actually washed the mower, sharpened blades, changed filters, etc.), reselling them come spring for a hefty markup (what the current market would demand), and reinvesting the profits into buying my equipment. This worked amazing back in 2008, not as easy now to do this but still do a couple each year like this.

jsslawncare
09-19-2011, 07:53 PM
Cash is KING! Never had any debt.

THIESSENS TLC
09-19-2011, 08:08 PM
debt free for 4 years! I love cash!

larryinalabama
09-19-2011, 08:17 PM
Compares Walmart to a lawn care company isn't exactly apples to apples.

I've never had any debt, but then again I'm primarily a maintenance company so all I've had to buy is mowers, trimmers, blowers, a trailer, etc. No need to go into debt for those things.

The way I paid for almost all my equipment was buying people's equipment in the offseason for a deep discount, cleaning them up (changed plugs, greased everything, actually washed the mower, sharpened blades, changed filters, etc.), reselling them come spring for a hefty markup (what the current market would demand), and reinvesting the profits into buying my equipment. This worked amazing back in 2008, not as easy now to do this but still do a couple each year like this.

I dont know what the deal was in 2008 but equiptment was being sold really cheap, I bought a lot of stuff that was near new for around 30% of retail. I cant find these deals anymore.

ed2hess
09-19-2011, 09:27 PM
Debt is dumb. Cash is king. Wait to buy still until you can ACTUALLY afford it. There's plenty of deals the CC companies offer (cashback, way-to-save, etc.) but only because they know they'll get back exponentially in interest. Stick to the Benjamins and you CAN'T get into debt.

Using cash at this time is not very smart....interest rates are at all time lows. Not possible to grow a business without staying in debt. I never in 30 years had a goal of paying for my equipment. The end game is growing something that can be sold someday for something.

flyingdutch16
09-19-2011, 09:47 PM
Using cash at this time is not very smart....interest rates are at all time lows. Not possible to grow a business without staying in debt. I never in 30 years had a goal of paying for my equipment. The end game is growing something that can be sold someday for something.

your still paying interest.... might just be me, but id rather keep that small percentage in the bank. Then again that would be what i would do.

Cash is king like some one already stated.

Congrats to the companies out there that are debt free. Dont see that much in America debt free companies or private people.

larryinalabama
09-19-2011, 10:09 PM
Its hard to believe that most are debt free, 4 years ago this post would have been like those politiocal posts, anr I think there was only a few of us debrt free guys.

Florida Gardener
09-19-2011, 10:18 PM
your still paying interest.... might just be me, but id rather keep that small percentage in the bank. Then again that would be what i would do.

Cash is king like some one already stated.

Congrats to the companies out there that are debt free. Dont see that much in America debt free companies or private people.

You obviously don't look around for deals. I just bought a ferris wb for 3 yr. 0% interest. Payments are $95/mo. But, most of you guys would rather pay the $3k up front bc "debt is dumb" and " I pay everything in cash."
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larryinalabama
09-19-2011, 10:27 PM
Using cash at this time is not very smart....interest rates are at all time lows. Not possible to grow a business without staying in debt. I never in 30 years had a goal of paying for my equipment. The end game is growing something that can be sold someday for something.

Well try to sell debt on autos and lawncare equiptment.

I see 14, 15,,and 16 year olds on hers all the time building businesses with cash.

Its far eaiser to grow a business slow and stable. Debt never equils customers. All mowers start to like like crap afte 700-800 hours.

Heres how debt work wheather its business or personal

Debt gets you a new home a new car and if your really stupid you can finance the living room coluch.
All that stuff is rally quite nice, the downfall is you are now going backwords, yes backwords. The house gets old the car get digned the couch is no longer conformatable. The bill comes for all the crap and you still owe nearly what you paid for the crap even though the car is worth 1/3 of what you bought it for and Good Will wont even pick up the couch. Eventually if you over extend you really LOOSE ALL THE STUFF THAT WASNT REALLY YOURS IN THE FIRST PLACE.

MowingMowingMowing
09-20-2011, 12:36 AM
I dont know what the deal was in 2008 but equiptment was being sold really cheap, I bought a lot of stuff that was near new for around 30% of retail. I cant find these deals anymore.

Yeah, idk why, but 2008 was ridiculous. I was a senior in high school and I was buying mowers left and right and selling them many times within the same month making between $500-$2,000 each. I was living the high life!

My best find was a floating deck Scag from a local dealer that was 3 years old. It had a flat tire and needed the recoil replaced, and the guy said he got it in on trade, couldn't have had more than 100-200 hours on it.

Said he wanted $500 for it, I tried to keep my composure and not look too excited as I knew it was already a steal... I bent down and started looking over the tire again and he said I'll give it to you for $400 today and I'll even lift it onto your trailer, and I took it.... I happened to have an extra tire at home.... Fast forward about $75 in parts later, sold it the next week for $2,500. Easiest money I've ever made.

Since 2008, it hasn't been that easy, but if you check around every once in a while you find some gold or simply a good mower to add to your fleet.

MowingMowingMowing
09-20-2011, 12:42 AM
You obviously don't look around for deals. I just bought a ferris wb for 3 yr. 0% interest. Payments are $95/mo. But, most of you guys would rather pay the $3k up front bc "debt is dumb" and " I pay everything in cash."
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If you're a big business and your equipment expense is substantial then you have a good point, but just for a $3,000 walk behinds for a mowing business is it worth it?

For me, I would much rather just shell out the cash, take the discount (whether it be the dealer, around here that will be 2%-3% and if they don't offer it use your CC, go straight to the bank and pay it off and collect the 2% from them) and be done with it.

Alternatively, you're paying $95 a month. That's one more headache you have to make sure gets paid each month. If I recall correctly, Topsites had some issues with this, where they stopped his direct withdrawal or something.

Everyone's situation is different, but on items that small, unless you are just dirt poor, I can't make sense of it. Time value of money is important obviously, but given the situation, I can't justify it. Just my 2 cents.

USA Lawn Care
09-20-2011, 01:26 AM
and my simple point is....even if you do know how to handle debt.....you are banking on the fact that tomorrow will be perfect and money will roll in.
things happen...natural disasters, etc....i just keep thinking back to Joplin, MO. Could be a lawn guy, painter, whatever. Finances a bunch of new stuff, payments will be made because he will have money rolling in because there are 20 jobs lined up.
Then BOOM.....tornadoes level the town or an earthquake......suddenly everyone's lawn that needed cut now needs a bulldozer and those 20 paint jobs lined up have walls lying on the ground. If you've financed it because you had to.....and didn't have any money....now you still don't have any money and you have no way to pay for it.
Slow and easy and debt free is simply taking 'Murphy' out of the Murphy's law because eventually Murphy always shows up.
Paying cash is simply a safety net that has kept my business financially stress free the past 2 seasons.

Florida Gardener
09-20-2011, 06:26 AM
If you're a big business and your equipment expense is substantial then you have a good point, but just for a $3,000 walk behinds for a mowing business is it worth it?

For me, I would much rather just shell out the cash, take the discount (whether it be the dealer, around here that will be 2%-3% and if they don't offer it use your CC, go straight to the bank and pay it off and collect the 2% from them) and be done with it.

Alternatively, you're paying $95 a month. That's one more headache you have to make sure gets paid each month. If I recall correctly, Topsites had some issues with this, where they stopped his direct withdrawal or something.

Everyone's situation is different, but on items that small, unless you are just dirt poor, I can't make sense of it. Time value of money is important obviously, but given the situation, I can't justify it. Just my 2 cents.
I'm totally well off. I could have dropped the 3k and paid the mower off. If Incan get 36 mo. 0%, I will take that every day. If making a payment each month is a headache, maybe you shouldn't be in business. Everyone keeps saying cash is king, so by having more cash on hand, that makes more sense, correct?? For guys just starting out in business, an offer like this is especially good bc they can get new equipment at a small monthly rate without paying any interest. New is nice. New means way less downtime. Plus, your bank isn't giving you money back. They give you points which in turn you can get cash back. I need 15k on my cc for 120. If it makes sense to you to pay cash up front so you can have 25, go for it. I can't make sense how an offer like this doesn't make sense to you??
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Hoss4x4
09-20-2011, 06:36 AM
I do both. I save until I can pay cash and still have cash in the bank. This way once I own it, it is mine and I can save for my next purchase. I have done it both ways and I can sleep alot better at night with no debt. I am hoping I can run my business the same way.

willretire@40
09-20-2011, 07:47 AM
Most of the time those 0% equiment deals have a $300 fee with it that the dealer pays so if you had cash you could have gotten that $300 of. The dealer will normally offer you a better deal with cash. If you go into the funiture store with cash you can save 15% so if you take their finance offer you will be paying 15% off the top. Also only 80% of those 0% loans get paid off on time before the back interest kicks in. I have a friend that has a 0% loan but when he added up the payments he would have been $100 short on the loan therefore the back interest would have kicked I'm if he didn't catch it.
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Florida Gardener
09-20-2011, 07:52 AM
Most of the time those 0% equiment deals have a $300 fee with it that the dealer pays so if you had cash you could have gotten that $300 of. The dealer will normally offer you a better deal with cash. If you go into the funiture store with cash you can save 15% so if you take their finance offer you will be paying 15% off the top. Also only 80% of those 0% loans get paid off on time before the back interest kicks in. I have a friend that has a 0% loan but when he added up the payments he would have been $100 short on the loan therefore the back interest would have kicked I'm if he didn't catch it.
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The fee on mine was $125.
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blk90s13
09-20-2011, 09:01 AM
This is my first year and I started with all my equipment paid off in full I owe nobody nothing and love it.

Just my customers owe me some money :laugh:

MowingMowingMowing
09-20-2011, 09:32 AM
I'm totally well off. I could have dropped the 3k and paid the mower off. If Incan get 36 mo. 0%, I will take that every day. If making a payment each month is a headache, maybe you shouldn't be in business. Everyone keeps saying cash is king, so by having more cash on hand, that makes more sense, correct?? For guys just starting out in business, an offer like this is especially good bc they can get new equipment at a small monthly rate without paying any interest.

Actually this, in most cases, is not the way new guys in the business should go. Going out and buying a bunch of new equipment when you are just starting out is foolish, if your biz doesn't go where you expect, you are still stuck with the payments (although I encourage this so I can pick up their equipment at LOW prices when they need to sell lol). Regarding the "no interest", you're still paying a $125 fee up front, so call it whatever you want to call it, but that is extra money your shelling out.

New is nice. New means way less downtime. Plus, your bank isn't giving you money back. They give you points which in turn you can get cash back. I need 15k on my cc for 120. If it makes sense to you to pay cash up front so you can have 25, go for it. I can't make sense how an offer like this doesn't make sense to you??
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I'm not going to argue with you about new vs. used as I can see both sides of the coin, but your statement about cc not giving money back is not necessarily accurate. I bought a $4,000 mower a couple years back, the dealer said if I paid cash he would take 2% off, instead I snagged my mom's cc and got 2.5% back, paid via CC and went straight to the bank and paid it off.

The fee on mine was $125.
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Let me sum this up....

Option #1 (your opinion, and we'll use your $3k walk behind for example and not include taxes for simplicity sake). You buy the mower for $3k, and pay $125 for the 3 years 0% financing, your total cash output is $3,125.

Option #2 (my way) ... I buy the mower for $3,000 paying with CC. I go to the bank, pay it off, and receive $75 back, my total cash output is now $2,925.

Basically, what I'm getting at here, is you are paying $200 more than me so you can spread the payments out over 3 years and use your money however in between instead of paying it out up front. The question you have to ask yourself is is it worth paying an extra $200 to not shell out the full amount at the beginning. Obviously this answer will vary from person to person, but personally, It would not be for me and I'd rather save an extra $200 or put it to use towards other things.

That's my opinion, at least on items in this price range. Obviously if we're talking very expensive items that might interfere with other obligations it is a different story.

You see what I'm saying?

Florida Gardener
09-20-2011, 09:59 AM
I'm not going to argue with you about new vs. used as I can see both sides of the coin, but your statement about cc not giving money back is not necessarily accurate. I bought a $4,000 mower a couple years back, the dealer said if I paid cash he would take 2% off, instead I snagged my mom's cc and got 2.5% back, paid via CC and went straight to the bank and paid it off.



Let me sum this up....

Option #1 (your opinion, and we'll use your $3k walk behind for example and not include taxes for simplicity sake). You buy the mower for $3k, and pay $125 for the 3 years 0% financing, your total cash output is $3,125.

Option #2 (my way) ... I buy the mower for $3,000 paying with CC. I go to the bank, pay it off, and receive $75 back, my total cash output is now $2,925.

Basically, what I'm getting at here, is you are paying $200 more than me so you can spread the payments out over 3 years and use your money however in between instead of paying it out up front. The question you have to ask yourself is is it worth paying an extra $200 to not shell out the full amount at the beginning. Obviously this answer will vary from person to person, but personally, It would not be for me and I'd rather save an extra $200 or put it to use towards other things.

That's my opinion, at least on items in this price range. Obviously if we're talking very expensive items that might interfere with other obligations it is a different story.

You see what I'm saying?

Yes, I do. My cc doesn't offer that so that wasn't a factor for me. I agree with what your saying as well. I'm throwing out my side of the coin bc there are a lot of pluses of using debt correctly. For someone to say, debt is dumb, or I only pay cash is somewhat ignorant IMO.
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JB1
09-20-2011, 10:17 AM
thats great that you pay cash and your debt free, that is really good. but your only talking about a $3000 dollar mower. Are you going to pay cash if you need a $25k or $30k tractor or skid steer, not me I'm gonna use there 0% money.

MowingMowingMowing
09-20-2011, 10:29 AM
thats great that you pay cash and your debt free, that is really good. but your only talking about a $3000 dollar mower. Are you going to pay cash if you need a $25k or $30k tractor or skid steer, not me I'm gonna use there 0% money.

refer to the end of my previous post.
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MDLawn
09-20-2011, 12:52 PM
First we're all never going to agree just like a Ford, Chevy, Dodge, Gas vs Diesel debate. But I'll give my thoughts anyways:dizzy:

I agree that if someone is offering 0% on something, even with a small fee, why not? Lets say you have $10,000 in the bank and are ready to get some equipment to start. Say you have a truck already but need a trailer, mower, handhelds, etc... Me I try and buy good stuff, not junk.

Option 1 - Buy everything with the cash you have and have about $500-$1000 left in the bank.


Option 2 - Buy hand helds, small trailer, and "stuff" with cash, 0% on mower and have $6000 in the bank. Lets even take the $175 fee. $5825


I like option 2 because it leaves me with some operating money, income money or "oh no" money. Lets say the truck you have all of a sudden needs repairs to the tune of $2000. Choosing option 2 lets me pay cash whereas option 1 leaves me stranded or actually using a credit card that is subject to 19% (or whatever) interest!

I agree no one should finance their life away. But I think having a safety net of cash is more important than blowing the bank just for the sake of paying cash. What I would try to do is have say $5000 in your cash account at all times for emergencies. Say you want to get a new back pack blower that is $450. Once you save that $450 and have $5450 you then go buy that piece and still have your safety net. Now if you started with $15,000 and want to spend $10,000 on stuff then fine but I still would like to have $15,000 for rainy day fun. I mean for a measly $175 it allows you to keep $15,000 (or whatever amount) in your bank account that could earn that $175 back in interest without lifting a finger. Rather than having to build that account back up, which was your personal money, you use the income from your business to pay off your business expense on a monthly basis and can rely on the cash for the "oh no" moments. Whether you pay for a $5000 item in cash or 0% payments it is an expense that needs to be recovered. Just because you pay cash and "owe" nothing on that item doesn't mean it's a forgotten expense. You are still out $5000. You still need to recover that! Especially if it was your personal cash. Because you paid for it, not your business, and your business owes you (which in this case you are the lender to your business).

If you are making money hand over fist then this is not even an issue. But c'mon its lawn maintenance and landscaping not exactly a hand over fist business to start up. I like the idea of paying cash and will try to do it as much as I can but if something can make me more efficient, expand my services and/or customer base, I'm going to take a long hard look at financing. I financed a dump trailer (0%) and had it paid off after a few jobs but I look deeper in that saved me time, got more jobs done, put years on my life (not needing to hand shovel debris out of the truck at the end of the day), and my business paid for it.

Obviously dont be a dummy and finance stuff that leaves a gray cloud looming over you wondering if you'll be able to get out of it!

32vld
09-20-2011, 01:23 PM
If you got to pay a fee to get 0% finance then you're not getting 0% finance because a $3000 machine should only cost $3000. Not $3000 plus a fee.

Always better to be debt free.

Bad economy's have caused many businesses to fail when their income did not cover their expenses.

When equipment is bought cash, elective expenses can be cut. Use less electric, less heat, less food, less clothes, less going out, etc.

Doing with less will increase the chances to weather bad times until the business gets back on track.

Having a bunch of equipment with monthly payments there is no way to cut those expenses and ride out the hard times.

With paid off equipment even if you only are now mowing 1 day a week those machines bought with cash are not costing money sitting in your shop the other 4 days. Remember that not making money is not the same as costing you money (payments due).

Yes large businesses can not operate without credit. The CEO's sign on the line for the Corp. Yet when the corp goes belly up the CEO's get to walk away.

LCO's are not large corps, and many banks will make the LCO personlly guarantee the loan against their personal assets because they are not large corps.

Now if I had $5,000 or $50,000 cash to buy a mower or a truck and would get 0% interest I would not pay cash. I'd leave the money in the bank and collect the interest. Keep my momey to make money and not have to worry about paying the loan because I have the money on hand if things slowed down. Best of both worlds.

hackitdown
09-20-2011, 04:03 PM
I am 7 years into this business, and was all cash/no debt until this year. I decided to buy an Exmark ZTR for $10K this spring. I planned to pay cash.

I financed instead. They offered 0% financing for 3 years. I used the cash I had saved for the mower to buy an aerator for $3K, and I bought a plow for $4K. The aerator will generate $3K to $4K in revenue, and the plow will generate around $8K this winter. I have the option of paying down the loan anytime.

So the way I see it, I have $11K extra revenue because I bought the other equipment. After I deduct the $7K I paid for the equipment, I will have an extra $4K in gross profit. Next year I'll have all $11K.

I think it makes sense for me since I have a very high likelihood of keeping all the equipment busy enough to generate enough revenue to fund the purchases. I think some guys get into trouble because they buy and finance stuff that sits in the yard. They want to be sure they have every kind of machine made.

MDLawn
09-20-2011, 04:14 PM
Now if I had $5,000 or $50,000 cash to buy a mower or a truck and would get 0% interest I would not pay cash. I'd leave the money in the bank and collect the interest. Keep my momey to make money and not have to worry about paying the loan because I have the money on hand if things slowed down. Best of both worlds.

This is exactly the point I'm trying to make. If you have the cash on hand to pay for the machine, and more, go get the 0% and then when you have enough over your 5 or 50k to pay for it then do so. I'm not sure how that is any different then paying cash up front. You made the cash to pay for it and still have the savings to cover bad times. I'm not so sure why people feel the need to empty their bank accounts to just pay cash? It's 0% or 0% plus a fee and I bet if you are a good enough consumer you can talk the dealer down $175 on the equipment to cover that. So then it could be 0%. Its all one big pie no matter how you slice it. I mean it's not like your paying $2000 interest on a $5000 machine. Your paying $175 to have the convenience to pay it later, but again you talked the dealer down the $175 so it doesnt matter :dizzy: :)

Also what if the machine you bought on a $175 fee made you more productive which allowed you to complete more work and acquire more jobs which then made you a good amount of extra money that year on top of paying it off. Small price to pay if it can make you more in the end! Maybe I'm that guy and took jobs that you could have acquired but you only made the same amount this year and cannot take on more work until next year when you have the cash but those accounts are now gone.......

Even if your business went south and failed I'd rather have the bank money to live off of while trying to sell the piece of equipment. Try doing that when you have little savings because you emptied the bank just to pay cash. Again whether you paid $3000 upfront or still owe on a 0%, you're still out $3,000 or fine $3,175, unless you talked the dealer down:laugh::).

I think the key here is having savings to begin with! It gives you more leverage on making purchasing decisions.

Florida Gardener
09-20-2011, 07:45 PM
This is exactly the point I'm trying to make. If you have the cash on hand to pay for the machine, and more, go get the 0% and then when you have enough over your 5 or 50k to pay for it then do so. I'm not sure how that is any different then paying cash up front. You made the cash to pay for it and still have the savings to cover bad times. I'm not so sure why people feel the need to empty their bank accounts to just pay cash? It's 0% or 0% plus a fee and I bet if you are a good enough consumer you can talk the dealer down $175 on the equipment to cover that. So then it could be 0%. Its all one big pie no matter how you slice it. I mean it's not like your paying $2000 interest on a $5000 machine. Your paying $175 to have the convenience to pay it later, but again you talked the dealer down the $175 so it doesnt matter :dizzy: :)

Also what if the machine you bought on a $175 fee made you more productive which allowed you to complete more work and acquire more jobs which then made you a good amount of extra money that year on top of paying it off. Small price to pay if it can make you more in the end! Maybe I'm that guy and took jobs that you could have acquired but you only made the same amount this year and cannot take on more work until next year when you have the cash but those accounts are now gone.......

Even if your business went south and failed I'd rather have the bank money to live off of while trying to sell the piece of equipment. Try doing that when you have little savings because you emptied the bank just to pay cash. Again whether you paid $3000 upfront or still owe on a 0%, you're still out $3,000 or fine $3,175, unless you talked the dealer down:laugh::).

I think the key here is having savings to begin with! It gives you more leverage on making purchasing decisions.

I don't get why people want yo empty thier accounts either. If you can keep cash in the bank and use someone else's money, why not? I never turn down 0% offers. I bought a brand new set of tires back in march from sears. I put it on my sears card and got 6 mo. 0%. Yes, I have the money to pay for them up front, but if I can keep cash on hand, why not?
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tlc1994
09-20-2011, 08:29 PM
The original discussion aimed at how people maintained a debt-free business, not whether what medium of currency was superior...

Still, I always refer to cash is king as in, don't buy something if you can't actually afford it (like we have grown so accustomed to seeing our expenses disappear on a magic, plastic, debt card). I don't think the OP was partial to cash only, but the main premise behind using a CC if you choose to do so is having the capital to back it up.

larryinalabama
09-20-2011, 08:35 PM
I don't get why people want yo empty thier accounts either. If you can keep cash in the bank and use someone else's money, why not? I never turn down 0% offers. I bought a brand new set of tires back in march from sears. I put it on my sears card and got 6 mo. 0%. Yes, I have the money to pay for them up front, but if I can keep cash on hand, why not?
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I have no idea how you can keep up with all this nonsence, personally I dont buy a 3000 mower and tires every year, or every 2 years so when its necesssary I just pay cash.

Reality is thers no such thing as free interest.

Florida Gardener
09-20-2011, 08:37 PM
I have no idea how you can keep up with all this nonsence, personally I dont buy a 3000 mower and tires every year, or every 2 years so when its necesssary I just pay cash.

Reality is thers no such thing as free interest.

On the tires, yes it is free financing. On the mower, it was a $125 fee. Divide that by 36 and it's about $3.50/mo. Good for you, keep paying cash for everything. If you talk to any businessman, or finance prlerson, they will tell you 0% interest is a smart thing.
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PTP
09-20-2011, 09:11 PM
If you talk to any businessman, or finance prlerson, they will tell you 0% interest is a smart thing.
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I am a business man and I am all about paying cash. It's not only about saving the interest money but it is also about making smart decisions. Paying cash will help you make smarter business decisions. It will help you to buy only those things that are really necessary. It will also make your bad decisions less painful because you won't have your leverage working against you.

This year, I wanted to expand. The problem was that I also needed more shop space, more equipment, and more advertising. I budgeted carefully, planned as best I could, bought used equipment, built a mezzanine in my shop, and added a couple hundred new accounts.

I won't say that it was easy, but I did it - with cash.

MDLawn
09-20-2011, 09:14 PM
On the tires, yes it is free financing. On the mower, it was a $125 fee. Divide that by 36 and it's about $3.50/mo. Good for you, keep paying cash for everything. If you talk to any businessman, or finance prlerson, they will tell you 0% interest is a smart thing.
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The problem with any 0% is that many people have no idea how it works, forget to make payments, dont pay off before 0% expires, etc.... Those types get burned...bad. For this type of person cash is probably the best option (not saying anyone in this discussion, just in general).

A lot of folks in this business aren't to bright.....just attracts the type. A friend of mine who works for a bank told me stories of how a mutual friend of ours would show up at the bank and just hand over checks without even knowing how much he was depositing. He is definitely a little behind the curve but he can sit on a mower and drive a truck. This poor guy couldn't handle running a business, this is just his job. He'd probably make better money working for someone else. 0% deals are not for him.

larryinalabama
09-20-2011, 09:17 PM
On the tires, yes it is free financing. On the mower, it was a $125 fee. Divide that by 36 and it's about $3.50/mo. Good for you, keep paying cash for everything. If you talk to any businessman, or finance prlerson, they will tell you 0% interest is a smart thing.
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I talk to several businessmen in our profession all the time and they are all business wise debt free and strive to be personally debt free.

Any Finance person will alaways encoruage you to borrrow money, thats what they do.

MDLawn
09-20-2011, 09:21 PM
I think we can all agree that a business can be run on a cash only basis and/or using special financing offers. Whatever works for your business plan. Cash is king but only if you have it stashed away.

larryinalabama
09-20-2011, 09:44 PM
I think we can all agree that a business can be run on a cash only basis and/or using special financing offers. Whatever works for your business plan. Cash is king but only if you have it stashed away.

The original post asked about debt, sure you can do what you want, however for lawncare I would never advise any one to run it with debt.

Florida Gardener
09-20-2011, 10:00 PM
I am a business man and I am all about paying cash. It's not only about saving the interest money but it is also about making smart decisions. Paying cash will help you make smarter business decisions. It will help you to buy only those things that are really necessary. It will also make your bad decisions less painful because you won't have your leverage working against you.

This year, I wanted to expand. The problem was that I also needed more shop space, more equipment, and more advertising. I budgeted carefully, planned as best I could, bought used equipment, built a mezzanine in my shop, and added a couple hundred new accounts.

I won't say that it was easy, but I did it - with cash.

I don't buy what I don't need. When I do buy something I need, and there is a 0% offer, I take it. I make the payments on time and don't pay the deferred interest. I have the cash to pay up front but I don't bc I would rather keep the cash in the bank.
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Florida Gardener
09-20-2011, 10:03 PM
The problem with any 0% is that many people have no idea how it works, forget to make payments, dont pay off before 0% expires, etc.... Those types get burned...bad. For this type of person cash is probably the best option (not saying anyone in this discussion, just in general).

A lot of folks in this business aren't to bright.....just attracts the type. A friend of mine who works for a bank told me stories of how a mutual friend of ours would show up at the bank and just hand over checks without even knowing how much he was depositing. He is definitely a little behind the curve but he can sit on a mower and drive a truck. This poor guy couldn't handle running a business, this is just his job. He'd probably make better money working for someone else. 0% deals are not for him.

That is why these offers are out there, bc most people get sucked in and don't make the payments or they don't pay in full at the due date. I am not one of them. Yes, most people in this biz are idiots and have no idea how to run a business. I look at them as people who can't hold a real job and become lawn boys.
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JB1
09-20-2011, 10:18 PM
yes I agree cash is king, but just curious are the ones preaching about cash, are these people who have problems with credit in the past or can't get credit if there life depended on it

Puddle of Oil
09-20-2011, 10:35 PM
yes I agree cash is king, but just curious are the ones preaching about cash, are these people who have problems with credit in the past or can't get credit if there life depended on it

I'm sure the provability is pretty high.:)

willretire@40
09-20-2011, 11:34 PM
I am a business man and I am all about paying cash. It's not only about saving the interest money but it is also about making smart decisions. Paying cash will help you make smarter business decisions. It will help you to buy only those things that are really necessary. It will also make your bad decisions less painful because you won't have your leverage working against you.

This year, I wanted to expand. The problem was that I also needed more shop space, more equipment, and more advertising. I budgeted carefully, planned as best I could, bought used equipment, built a mezzanine in my shop, and added a couple hundred new accounts.

I won't say that it was easy, but I did it - with cash.

That was going to be my next point. Business is all about checking your numbers almost everyday and making smart decisions. You do that alot better with cash. I am not saying that you shouldnt use credit but I think that cash is a smarter move. Also if you save for something you appreciate it alot more. If you start of with a push mower then you will appreciate the business more and that upgrade in mower down the road.

Will P.C.
09-20-2011, 11:45 PM
Yes, I do. My cc doesn't offer that so that wasn't a factor for me. I agree with what your saying as well. I'm throwing out my side of the coin bc there are a lot of pluses of using debt correctly. For someone to say, debt is dumb, or I only pay cash is somewhat ignorant IMO.
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+1
A smart businessman knows how to use debt and financing to his advantage.

tlc1994
09-20-2011, 11:59 PM
yes I agree cash is king, but just curious are the ones preaching about cash, are these people who have problems with credit in the past or can't get credit if there life depended on it

I`m in high school so I guess you could argue my opinion is completely bias since I don`t have a CC, nor could I apply for financing. All I can say is that the OP is obviously interested in how others have achieved debt-free companies, NOT whether or not "good debt" is beneficial.
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USA Lawn Care
09-21-2011, 04:10 AM
yes....back to the original OP.....had to look back to see what we were actually trying to answer here :) "how many years and any tips?" was the question.....

debt free 2 seasons.
ran a lawn business 15 years ago (did it for 5 years full time).
financed the crap out of everything because every dealer was willing to hand it over to me.
2 trucks, 3 guys, lots of equipment, cutting about 120 yds a week back then.
Got out for personal reasons....sold it all....
Back in again, paid off my personal debt and decided to carry that to my own business again and simply be patient, patient, patient and grow slow and steady with continuous positive cash flow.
Tip: patience, patience, patience.
Tip: I thought I had to have debt to grow.........my business has no debt and it is growing nicely just like it did years ago.

Florida Gardener
09-21-2011, 06:34 AM
That was going to be my next point. Business is all about checking your numbers almost everyday and making smart decisions. You do that alot better with cash. I am not saying that you shouldnt use credit but I think that cash is a smarter move. Also if you save for something you appreciate it alot more. If you start of with a push mower then you will appreciate the business more and that upgrade in mower down the road.

Appreciating something more has nothing to do with cash vs. Credit. I bought my 2008 wright stander brand new on a 1 yr. 0% interest. I paid each payment with my hard earned money and it was paid off in a year. I didn't have to fork over 5k up front for it. Emotions have nothing to do with financing.
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MDLawn
09-21-2011, 08:29 AM
It took me 3 years (all part time) to pay for the following

New Exmark 48" Turf Tracer (0% and no fees, paid off after 1 season)
New Exmark 36" Belt Drive Metro (bought 2nd season 0% and no fees, paid off second season, sold 3 seasons after buying it for $300 less than I paid for it!!)
6x12 Landscape Trailer (bought with cash, sold for $100 less than I paid for it!!)
6x10 Dump Trailer
7x14 Dump Trailer (Bought at end of 4th season, sold off 6x10, put that as down payment + cash from landscape trailer, 0% + $125 fee for the rest, paid off the following season)

Small stuff such as hand helds, blower, chain saw, tiller, hand tools, and other misc equipment paid with money earned by business, not my income from my full time job. The mower and trailer that I sold for such little less than I paid for were because a friend of mine owns a business that sold this stuff and he gave me incredible deals on them. I also got in the 0% before they started charging those fees for the mowers.

If I had done this full time, everything could have been paid off much quicker.

- Get what you need not what everyone else has.

I bought a dump trailer because after working for someone for 5 years I got sick of having to shovel stuff out of a truck. Plus I was able to do 2-4 small jobs in one day because I could fill it up with all the debris from each job, dump it, then get the materials I needed to finish all of them. Wasn't happening with a pick up truck. But I also had other means of purchasing (full time job)

- If you do have financing put any extra money to pay that piece off rather than putting it in your pocket or into something not business related. Once it's paid off then fill your pocket!

- I agree with the slow and steady. You'll get better customers that way rather than rapidly expanding then needing any work you can get.

BPS##
09-21-2011, 08:35 AM
Business debt......... $0.00


Personal debt (house, wife's car) yes


Cash is king!!!! I have a debit card for purchases.
NO credit cards. I had to learn the very hard and very stressful way that credit cards are not for me.

Hoss4x4
09-21-2011, 04:19 PM
I'm sure the provability is pretty high.:)

Not at all. Just chose to pay cash and have savings. The best of both worlds.

USA Lawn Care
09-22-2011, 12:23 AM
I would have to add that in no way am I putting down someone who's business runs using credit. And, by no means can I say that the temptation has not been there to go out and buy something on credit (which I would qualify for I might add...). I've simply chosen to take the risk factor out of my business and use only cash which forces me to save $ and actually think about what I am doing and think about the pricing a little more and think of all the options before I spend my hard earned cash. Is it easy? Nope. A lot of people think it's dumb to drain my account to purchase something. But I'm not draining anything. I've saved for what I wanted to buy and with no payments to make, the cash comes right back into my account very quickly. I could park my truck tomorrow and not cut another yard and not have any expenses to pay that actually force me to go out there and pay off equipment. Again, I'm truly not knocking anyone using credit.....that's not for me to judge. Most of the time, credit works and makes life more convenient. I simply am choosing to do things differently and all I can say is that I have no monetary stress with this business anymore and I am actually in complete control of what I do. And, yes, a debt free business seems wierd and unimaginable to a lot of people out there. Never bank on money that is not in your hand yet, COLLECT THAT MONEY AS QUICKLY AS YOU CAN, and operating 'in the black' is quite a fun way to run a business. It works and no one can tell me otherwise.

txgrassguy
09-22-2011, 08:39 AM
I have only borrowed money for larger ticket items I really needed like a new truck and a shaping 4X4 tractor. All are paid off and have been for several years.

One way to ensure you get maximum life out of your equipment is to shorten the maintenance interval for whatever you are operating. This includes cleaning the machines/equipment at least one time per week. Doesn't cost much and really adds life to the equipment. I still have a couple of machines well over 2,500 hrs and still running strong. Now they aren't first line use but make for valuable back ups.

Regarding appearance, one sure way to separate your business from the low ball people out there is to have clean, rust and dent free, truck,trailer and equipment. The higher socio-economic demographic does take notice of a more professional appearing outfit. Do you really think a family that has spent hard earned money buying a large house and grounds wants Earl the cable guy in a beat up truck and cheap equipment seen around them? If you think No, you had better think again.

Also, never underestimate uniformity. You don't have to dump tons of money into silk screening shirts. Buy in bulk from Costco good heavy weight T-shirts all in the same color, spend $60 a door for decent vinyl lettering for the truck and attach simple metal plates to your trailer (if it isn't enclosed) with the same logo/info. I cannot tell you how often I am stopped either at a light or while re-fueling by people in larger expensive vehicles wanting to speak with me - all because they noticed the uniformity and logo's and prefer having my rig verse an oil leaking Exxon special in front of their property.

MDLawn
09-22-2011, 09:41 AM
Regarding appearance, one sure way to separate your business from the low ball people out there is to have clean, rust and dent free, truck,trailer and equipment. The higher socio-economic demographic does take notice of a more professional appearing outfit. Do you really think a family that has spent hard earned money buying a large house and grounds wants Earl the cable guy in a beat up truck and cheap equipment seen around them? If you think No, you had better think again.

Also, never underestimate uniformity. You don't have to dump tons of money into silk screening shirts. Buy in bulk from Costco good heavy weight T-shirts all in the same color, spend $60 a door for decent vinyl lettering for the truck and attach simple metal plates to your trailer (if it isn't enclosed) with the same logo/info. I cannot tell you how often I am stopped either at a light or while re-fueling by people in larger expensive vehicles wanting to speak with me - all because they noticed the uniformity and logo's and prefer having my rig verse an oil leaking Exxon special in front of their property.

I know that this subject you have started is a little off topic but I couldnt agree more with it. I think with opening this topic you just struck a match near gasoline, but whatever. The guy I worked for never had logo's or letting on vehicles but we had shirts and man his stuff (truck, trailer, equipment) was kept in great shape! The jobsite was always kept clean too. He got a lot of compliments on how neat and clean his stuff was. People were happy he had that so they didn't get a beat piece of junk sitting in front of their house. I think I had nice stuff and kept it clean too and got compliments for it also. No one every gave me the line "that must be expensive" or "you must be doing REALLY well for yourself". Why? Because they drive a Lexus, BMW, Mercedes, etc... Not to mention my trucks are used, but clean. If you service Joe Schmoe, he's going to be envious. Serve a wealthy client and they don't even notice what you have just how neat & clean it looks.

I know even for myself, who is far from rich, I appreciate well taken care of stuff. I recently had a nice window done and the window company subbed out the trim work. I pulled in my driveway next to this beat pos dodge with so much garbage in the bed and stuffed in the cab. They did a just ok job with the trim but when I came home I wasn't sure if I was being robbed or guys doing work! Small things, like apperance, go a long way. You don't need new, just clean and well kept.

stan the man
09-22-2011, 10:39 AM
15 years in business 10 years debt free. 4 houses debt free. all trucks and all equipment debt free

lawnagent
10-03-2011, 02:14 PM
I know for a fact that in the automotive industry, you pay more for a 0% finance vehicle than you do if you pay cash. Therefore its not really interest free if you pay more for it. Every time I ever figured it on anything else mowers, atv's it came out the same. Paying more principal for 0% than if you payed cash. You need someone besides yourself to ask a dealer their cash price. They are to smart to give one customer both parameters up front. You would figure it out.

lawnagent
10-03-2011, 02:37 PM
Emptying the account to pay cash for a big purchase shouldn't be to bad if you are debt free. Everything you make this week and next week and wala! alot of cash on hand again.

larryinalabama
10-03-2011, 09:17 PM
15 years in business 10 years debt free. 4 houses debt free. all trucks and all equipment debt free

Thats why they call you stan the man

RSK Property Maintenance
10-03-2011, 09:43 PM
having a debt is okay, you just have to be smart about, and can't go buying new equipment and trucks for fun, but if you need to upgrade or even want to and know you will have work for said equipment then its not bad to finance it, but if you only have 1000 dollars a month in work and go out and buy a brand new scag turf tiger with a 61" deck and turbo diesel motor, and a brand new trailer and then a 2011 f550 dump to pull it all, that would be dumb. but if you have 10,000 dollars of work every month and need a bigger trailer to fit all of your equipment on it at once, then ya borrowing 3500 isn't a bad idea at all, you just have to be responsible with your money and make smart purchases. also planning out how and when you will be able to pay off whatever debt you get into isn't a bad idea either.

stan the man
10-04-2011, 07:37 AM
Thats why they call you stan the man

the reason they call stan the man. is stan the man is my uncle.

BESSY12
02-04-2012, 03:30 PM
I am running pretty well debt free. I usually don't buy anything until I can pay upfront in full, (only exception was the mower i bought spring of 2011 in a pinch). Currently the only debt I have is to my father for repairs on the bumper of his pickup truck. (LONG STORY)

wildstarblazer
02-04-2012, 06:39 PM
I'm totally well off. I could have dropped the 3k and paid the mower off. If Incan get 36 mo. 0%, I will take that every day. If making a payment each month is a headache, maybe you shouldn't be in business. Everyone keeps saying cash is king, so by having more cash on hand, that makes more sense, correct?? For guys just starting out in business, an offer like this is especially good bc they can get new equipment at a small monthly rate without paying any interest. New is nice. New means way less downtime. Plus, your bank isn't giving you money back. They give you points which in turn you can get cash back. I need 15k on my cc for 120. If it makes sense to you to pay cash up front so you can have 25, go for it. I can't make sense how an offer like this doesn't make sense to you??
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I agree with diamond, cash flow is important.

ReddensLawnCare
02-04-2012, 10:56 PM
I am 7 years into this business, and was all cash/no debt until this year. I decided to buy an Exmark ZTR for $10K this spring. I planned to pay cash.

I financed instead. They offered 0% financing for 3 years. I used the cash I had saved for the mower to buy an aerator for $3K, and I bought a plow for $4K. The aerator will generate $3K to $4K in revenue, and the plow will generate around $8K this winter. I have the option of paying down the loan anytime.

So the way I see it, I have $11K extra revenue because I bought the other equipment. After I deduct the $7K I paid for the equipment, I will have an extra $4K in gross profit. Next year I'll have all $11K.

I think it makes sense for me since I have a very high likelihood of keeping all the equipment busy enough to generate enough revenue to fund the purchases. I think some guys get into trouble because they buy and finance stuff that sits in the yard. They want to be sure they have every kind of machine made.

Not trying to be a jerk, but do you regret that decision now? With the snow plow?

USA Lawn Care
02-05-2012, 06:34 AM
In a perfect world, using debt 'wisely' will always work out.
It is not a perfect world and what paying cash for equipment takes out of the equation are things like natural disasters, etc. Cash eliminates risk. Financing thousands of dollars worth of equipment because you just landed tons of new clients because of your great marketing looks like a great plan until something happens.
Ex: Solo business operator. All ready for the big mowing season. Financed $15k worth of equipment. Tragedy in the family occurs and he's mentally just not able to function. Or.....I keep bringing it up simply because when I heard about Joplin, MO last year this exact scenerio was what I was thinking about. What about all the lawn guys who had counted on mowing yards that are no longer there???

So.....to truly protect yourself, the safe bet is to just completely think the $$ plan through and just pay cash. Buy used gear.....make a little money....sell used gear....get a little better gear......save a little more money....sell the better used gear....buy nice gear.

Just some friendly advice and I hope everyone has a profitable 2012.

jsslawncare
02-05-2012, 07:54 AM
Debt free business and personal life. (except my house)

agent walker
02-15-2012, 03:58 PM
debt free all my life. Tho I'm still single and at home and don't have any property. Hopefully this year I'll make enough to change some of that

muddywater
02-15-2012, 06:54 PM
I'm totally well off. I could have dropped the 3k and paid the mower off. If Incan get 36 mo. 0%, I will take that every day. If making a payment each month is a headache, maybe you shouldn't be in business. Everyone keeps saying cash is king, so by having more cash on hand, that makes more sense, correct?? For guys just starting out in business, an offer like this is especially good bc they can get new equipment at a small monthly rate without paying any interest. New is nice. New means way less downtime. Plus, your bank isn't giving you money back. They give you points which in turn you can get cash back. I need 15k on my cc for 120. If it makes sense to you to pay cash up front so you can have 25, go for it. I can't make sense how an offer like this doesn't make sense to you??
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I always get a better deal when i pay cash. Alot of times i pay my venders in green cash at the end of the month... One particular vendor saves me 17% when i pay cash.

Credit card points are a joke imo. It comes to like .1% you get back. I prefer to pay cash and get them to knock the 3% credit card fee off.

I cant make sense of financing equipment especially less than 30k purchases. Maybe people just are not profitable and dont keep large cash cushions?

I think paying cash forces you to negotiate your best pricing and forces you to really consider how long it will take to recoup your purchases.

I have noticed most of the companies that doing well in this economy are debt free companies. Financing just isnt as cool as it used to be.

Florida Gardener
02-15-2012, 11:41 PM
I always get a better deal when i pay cash. Alot of times i pay my venders in green cash at the end of the month... One particular vendor saves me 17% when i pay cash.

Credit card points are a joke imo. It comes to like .1% you get back. I prefer to pay cash and get them to knock the 3% credit card fee off.

I cant make sense of financing equipment especially less than 30k purchases. Maybe people just are not profitable and dont keep large cash cushions?

I think paying cash forces you to negotiate your best pricing and forces you to really consider how long it will take to recoup your purchases.

I have noticed most of the companies that doing well in this economy are debt free companies. Financing just isnt as cool as it used to be.

I have plenty of cash on hand. If I need to outlay cash for something I can't finance, I have the cash to do it. I highly doubt your getting 17% off gas, edger blades, shovels, etc. I'm going to buy it why not get something back for it.
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cody890
02-16-2012, 02:23 AM
I'm debt free and have 3 Dixie Choppers, 3 walk behinds, tons of handhelds, and a 30hp kubota diesel tractor with tons of attachments for it. I use a 20ft. 10k trailer and have a nice sno-way plow for one of my trucks.

I prefer to add new equipment / upgrade equipment when the money is there. I seem to have a hard enough time finding good, reliable help so I'm not really pushing to expand to 2 crews. But I would like to get my chem license and start offering those services. I would just start off with used equipment and upgrade it over time like I always have. But I'm also not too bad at repairing equipment so that's why that method works well for me.

billpiper
02-16-2012, 07:33 AM
I'm totally well off. I could have dropped the 3k and paid the mower off. If Incan get 36 mo. 0%, I will take that every day. If making a payment each month is a headache, maybe you shouldn't be in business. Everyone keeps saying cash is king, so by having more cash on hand, that makes more sense, correct?? For guys just starting out in business, an offer like this is especially good bc they can get new equipment at a small monthly rate without paying any interest. New is nice. New means way less downtime. Plus, your bank isn't giving you money back. They give you points which in turn you can get cash back. I need 15k on my cc for 120. If it makes sense to you to pay cash up front so you can have 25, go for it. I can't make sense how an offer like this doesn't make sense to you??
Posted via Mobile Device

Borrowing money can be helpful. Diamondlandscaping can pay cash, but will borrow, when it is advantageous to him, allows him to hold on to his cash. But he can pay it off if he needs to and won't have to quit making payments if business is off. If the banks call in his loans, as they recently have on many people during this recession, it may be an inconvenience, but it won't shut him down.

Procut's story is one that shows that owing a lot of money can hurt you, even if you're doing it the right way.

If you have to borrow money to buy equipment, and you have to have a certain level of business to be able to cover the payments, then you're in trouble if your business doesn't stay at that level.

The Cash Is King guys may eat a little lighter during a business downturn, but they don't have to worry about the bank coming to get their equipment.

Money lending has been around as long as money has been around. Borrowing can be good and it can be bad. As Americans, we have had access to easy money for a long time and we're used to getting what we want right away. Look what easy money has done to us in this country.

By and large, in this industry where many of the companies are small operations, those of us that are debt free are generally more stable and able to handle a down-turn than those of us with debt.

muddywater
02-16-2012, 07:34 AM
I have plenty of cash on hand. If I need to outlay cash for something I can't finance, I have the cash to do it. I highly doubt your getting 17% off gas, edger blades, shovels, etc. I'm going to buy it why not get something back for it.
Posted via Mobile Device

Yes I do get 17% back from a certain vendor... 10% off and no sales tax. Another vendor that owns a tree farm I bought some trees the other day and saved 25% because I paid cash. I run a credit card for convenience... not the piddlyass rewards.

So you don't think you could have saved a few hundred dollars paying cash for the $3k mower?

Florida Gardener
02-16-2012, 09:16 AM
Yes I do get 17% back from a certain vendor... 10% off and no sales tax. Another vendor that owns a tree farm I bought some trees the other day and saved 25% because I paid cash. I run a credit card for convenience... not the piddlyass rewards.

So you don't think you could have saved a few hundred dollars paying cash for the $3k mower?

Sure, maybe. But I am growing a lot right now and if I need another larger ticket item that I have to pay cash for, I have it without depleting funds. I didn't say you don't get 17% off, I just doubt it's on small ticket items.
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living Green Property
02-19-2012, 10:17 PM
This is such a stupid thing there is nothing wrong with going in debt. I just bought 2 exmarks and I got 0% interest why pay cash when they are going to keep the money in it for me? That was awfully nice of exmark.lol Yeah I could have paid cash but now I have that 15 grand in my bank account gaining interest so I am making money off loaning. As long as you have capitol you will be fine. Cash flow is important and you want to make sure you have a nice cushion especially in this business. The lawn care business is feast and famine. Obviously if you can hardly make your loans then you are way to in debt. And if you loan money irresponsibly it will sink you in a hurry, Such as loaning $50,000 at 7% without a single customer. With this economy money is cheap and interest is at an all-time low. Use the banks money to grow your business not yours. Again this is a topic about cash flow not payments. And if you know anything about basic business principals you will agree with me. I know im going to get hate posts saying Im going to go under trust me I am not going any ware.
Example you have $100,000 and you want to by a rental property the property is $100,000 you can drop cash on it and buy it right out. Or you can put $100,000 down on 5 propertyís (20% for each of the 5 propertyís $20,000). So now you will have the same income for the 20 years. but in 20 years if you loaned the money how many propertyís will you own? 5!! And then you will really be rolling in the cash

living Green Property
02-19-2012, 10:33 PM
Most of the time those 0% equiment deals have a $300 fee with it that the dealer pays so if you had cash you could have gotten that $300 of. The dealer will normally offer you a better deal with cash. If you go into the funiture store with cash you can save 15% so if you take their finance offer you will be paying 15% off the top. Also only 80% of those 0% loans get paid off on time before the back interest kicks in. I have a friend that has a 0% loan but when he added up the payments he would have been $100 short on the loan therefore the back interest would have kicked I'm if he didn't catch it.
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Letís say you take out an $8000 loan at 0% for 36 months and you have to pay a $300 fee. If you would take the loan and invest that $8000 at letís say 5% for 36months you can do that right now. I got 5% last year with most of my investments. With my calculations that would come out to right around $631 payed to you in intrest so by spending that $300 and loaning money you put $331 in your pocket. Am I the only one on here who runs numbers?

living Green Property
02-19-2012, 10:42 PM
A finance professor told me once the most important piece of equipment a business can own is a calculator a loan calculator, a piece of paper and a pencil. Forget all the fighting everyone gets into which is better a Scag or Exmark. We should be arguing over weather a battery operated or solar operated calculator is better. (I prefer solar be green)lol At the end of the day itís all about numbers and the company who can manage money the best is going to grow! Quality is important but there are a million people who can mow a lawn nice. But only a few company who can manage a business and run their finances.

Puddle of Oil
02-19-2012, 10:42 PM
I agree with all of what you said.

living Green Property
02-19-2012, 10:45 PM
I agree with all of what you said.

I read on here all this questions how much to charge and what to spend. I am like umm you should run the number right after you decide to get into business. no wonder why you are 5 years in and not making money.lol

lawnagent
02-19-2012, 10:57 PM
Living Green Property you said, This is such a stupid thing there is nothing wrong with going in debt. I just bought 2 exmarks and I got 0% interest why pay cash when they are going to keep the money in it for me? That was awfully nice of exmark.lol Yeah I could have paid cash but now I have that 15 grand in my bank account gaining interest so I am making money off loaning. As long as you have capitol you will be fine. Cash flow is important and you want to make sure you have a nice cushion especially in this business.

Are you paying this off before the terms end? If not it is not zero percent. The idea and good one at that at avoiding the debt is that we cannot always control what happens, get in a car wreck family member gets sick, swarm of locusts, whatever. Let one thing happen to cause you to not pay it off on time and you could be up the creek. On 0% finance deals let one thing cause you to not pay it off in time and suddenly you owe an astronomical amount of interest, those non payoff interest rates are the maximum percent interest rate the law will allow. AND you WILL be back charged interest over the ENTIRE length of the loan. NOT just one month cause you were a month late paying it off. ALL the months. So it just makes sense to pay cash. Besides everyone argument about needing a cash cushion doesn't hold water. If you are debt free then you can pile cash FAST as you are able to stockpile nearly everything you bring in. Why take a chance?

living Green Property
02-19-2012, 11:28 PM
Living Green Property you said, This is such a stupid thing there is nothing wrong with going in debt. I just bought 2 exmarks and I got 0% interest why pay cash when they are going to keep the money in it for me? That was awfully nice of exmark.lol Yeah I could have paid cash but now I have that 15 grand in my bank account gaining interest so I am making money off loaning. As long as you have capitol you will be fine. Cash flow is important and you want to make sure you have a nice cushion especially in this business.

Are you paying this off before the terms end? If not it is not zero percent. The idea and good one at that at avoiding the debt is that we cannot always control what happens, get in a car wreck family member gets sick, swarm of locusts, whatever. Let one thing happen to cause you to not pay it off on time and you could be up the creek. On 0% finance deals let one thing cause you to not pay it off in time and suddenly you owe an astronomical amount of interest, those non payoff interest rates are the maximum percent interest rate the law will allow. AND you WILL be back charged interest over the ENTIRE length of the loan. NOT just one month cause you were a month late paying it off. ALL the months. So it just makes sense to pay cash. Besides everyone argument about needing a cash cushion doesn't hold water. If you are debt free then you can pile cash FAST as you are able to stockpile nearly everything you bring in. Why take a chance?


Read carefully I sad manage your debt and have a cushion because this industry is feast and famine. As the consumer donít sign a loan that locks you in. you have the choice to go get another loan. And business is a risk life happens and if something really bad happens to you, you pry are going to go out of business weather or not your equipment is paid for. Also if you donít have a title and something happens to you and you are locked in and you canít make the payments you can sell that piece of equipment and just make the payment till the end while making interest on the money. So you will still be ahead, I know there are still factors like is it worth less than what I paid for it. But due to this economy used equipment is still holding its value. And I will agree there are scam loans out there like if you are one day late you get charged interest, well its called responsibility. Make sure you get your payment in on time. And do I look like the type of guy that just signs and does not read all the pages. The loans are 0% for 36 months in 36 equal payments.

But about the pile cash quicker it does not matter if you put in $10,000 of your cash or $10,000 of the banks money in to buy a piece of equipment. You still have money in your equipment weather its your money or the banks. This is hard to understand I get it and Iím giving a crash course in finance. (I have my masters in Economics BS in business and a minor in finance)( and still not good at gramer.lol) So you still have to pay the piece of equipment off. If u drop $10,000 and donít have to make payment thatís great but you still have to generate at least what you spent on the piece of equipment in order to make money so if you walk in to your accountant at the end of the year and said I paid cash for a $10,000 mower and I brought in $12,000 so theoretically you made $2000 (im excluding all the other obvious expenses gas insurance im making this as simple as I can) or you can walk in to the accountant and say I loaned $10,000 at 0% and brought in $12,000. Whatís the difference there isnít one except you had $10,000 all season to use for whatever you wanted. And not to mention if you have you money in bonds or stocks you would have made money off of interest of that money. so you would be further ahead. So if an emergency happens you would be better off loaning problem because you now have a $10,000 cushion until you have a problem with capitol. So see by paying cash you can get yourself in a jam almost faster than a responsible laon. Did I explain it well if not ill try going in depth a little more I spent 6 years of my life studying this its hard to explain in 30 min.

muddywater
02-19-2012, 11:33 PM
Living Green Property you said, This is such a stupid thing there is nothing wrong with going in debt. I just bought 2 exmarks and I got 0% interest why pay cash when they are going to keep the money in it for me? That was awfully nice of exmark.lol Yeah I could have paid cash but now I have that 15 grand in my bank account gaining interest so I am making money off loaning. As long as you have capitol you will be fine. Cash flow is important and you want to make sure you have a nice cushion especially in this business.

Are you paying this off before the terms end? If not it is not zero percent. The idea and good one at that at avoiding the debt is that we cannot always control what happens, get in a car wreck family member gets sick, swarm of locusts, whatever. Let one thing happen to cause you to not pay it off on time and you could be up the creek. On 0% finance deals let one thing cause you to not pay it off in time and suddenly you owe an astronomical amount ofinterest, those non payoff interest rates are the maximum percent interest rate the law will allow. AND you WILL be back charged interest over the ENTIRE length of
the loan. NOT just one month cause you were a month late paying it off. ALL
the months. So it just makes sense to pay cash. Besides everyone argument about needing a cash cushion doesn't hold water. If you are debt free then
you can pile cash FAST as you are able to stockpile nearly everything you bring in. Why take a chance?

I agree. I just cannot imagine people financing these 3-10k mowers AND having fat bank accounts. Just doesn't make sense.

So they finance 15k worth of mowers that they could have paid cash for. Now they have a 15k cushion.... Not much of a cushion if you ask me!

If you REALLY want to save money, buy slightly used equip and trucks. This is immediate savings that add zeros in black ink.

muddywater
02-19-2012, 11:50 PM
Read carefully I sad manage your debt and have a cushion because this industry is feast and famine. As the consumer don’t sign a loan that locks you in. you have the choice to go get another loan. And business is a risk life happens and if something really bad happens to you, you pry are going to go out of business weather or not your equipment is paid for. Also if you don’t have a title and something happens to you and you are locked in and you can’t make the payments you can sell that piece of equipment and just make the payment till the end while making interest on the money. So you will still be ahead, I know there are still factors like is it worth less than what I paid for it. But due to this economy used equipment is still holding its value. And I will agree there are scam loans out there like if you are one day late you get charged interest, well its called responsibility. Make sure you get your payment in on time. And do I look like the type of guy that just signs and does not read all the pages. The loans are 0% for 36 months in 36 equal payments.

But about the pile cash quicker it does not matter if you put in $10,000 of your cash or $10,000 of the banks money in to buy a piece of equipment. You still have money in your equipment weather its your money or the banks. This is hard to understand I get it and I’m giving a crash course in finance. (I have my masters in Economics BS in business and a minor in finance)( and still not good at gramer.lol) So you still have to pay the piece of equipment off. If u drop $10,000 and don’t have to make payment that’s great but you still have to generate at least what you spent on the piece of equipment in order to make money so if you walk in to your accountant at the end of the year and said I paid cash for a $10,000 mower and I brought in $12,000 so theoretically you made $2000 (im excluding all the other obvious expenses gas insurance im making this as simple as I can) or you can walk in to the accountant and say I loaned $10,000 at 0% and brought in $12,000. What’s the difference there isn’t one except you had $10,000 all season to use for whatever you wanted. And not to mention if you have you money in bonds or stocks you would have made money off of interest of that money. so you would be further ahead. So if an emergency happens you would be better off loaning problem because you now have a $10,000 cushion until you have a problem with capitol. So see by paying cash you can get yourself in a jam almost faster than a responsible laon. Did I explain it well if not ill try going in depth a little more I spent 6 years of my life studying this its hard to explain in 30 min.

I think we all understand debt. What I am trying to understand is why a profitable established company would want to finance 15k? You can't write that check AND have a nice cushion?

When I buy slightly used(100hrs on a ztr, 300-400hrs on heavy equip, 25-50k miles on trucks) I save thousands and thousands of dollars... which would not be the case if I financed everything new.

living Green Property
02-20-2012, 12:05 AM
I agree. I just cannot imagine people financing these 3-10k mowers AND having fat bank accounts. Just doesn't make sense.

So they finance 15k worth of mowers that they could have paid cash for. Now they have a 15k cushion.... Not much of a cushion if you ask me!

If you REALLY want to save money, buy slightly used equip and trucks. This is immediate savings that add zeros in black ink.

True they have fat bank accounts because they are financing equipment. Iím not getting into specific with my finances but I could pay cash for all my loans right now and still operate comfortably. See for me we get a fleet discount from exmark so a lazer z costs me about $8000 new. We put about 650 hours a year on each mower. We only keep them for 2 years. At 2 years they have about 1300 hours on them I then sell them for about $5000 now that means it only costs me $1500 a year to run that Machine. If I break that down to hours that $2.3 an hour. Not to mention we donít have to maintain them that well because we are not holding on to them and if something does happen itís under warranty. If I bought a used one we would have it won out faster and then I would have to replace parts and it would actually be more expensive for us and if we have a break down that would cost me money. we have had motors blow at 900 hours well if it was a 3 year old mower ts out of my pocket and a new motor from experience is $2000 so now im behind. Im not saying every one operates the way we do and each business is different and yes at first buying used equipment is not bad. But as your business grows new equipment is not always a bad thing if you can. Trucks we used to buy used one but now we can buy them for $30,000 run them for 4 years sell them with 80,000 miles for $25,000 so thatís only over $1000 a year it cost us to run them. If I bought one with 80,000 miles for $25,000 and kept it for 4 years it would be worth 15,000 see how now it cost us over $2000 a year. so see how if u need and can afford and have the work for new equipment it pays to buy new equipment. I will buy used like over seeders, bed edgerís and aerator.

living Green Property
02-20-2012, 12:16 AM
I think we all understand debt. What I am trying to understand is why a profitable established company would want to finance 15k? You can't write that check AND have a nice cushion?

When I buy slightly used(100hrs on a ztr, 300-400hrs on heavy equip, 25-50k miles on trucks) I save thousands and thousands of dollars... which would not be the case if I financed everything new.


To be honest a lot of landscapers/contracter get themselves in trouble with new trucks I think that you should wait till you are big enough and making enough money to buy a new one. i have seen this alot of times when i worked at an accounting firm.

And you are not wise if you are sitting with an excess of capital in a checking account ( I Am talking about after what your monthly expenses are if it cost you $18,000 a month donít leave $33,000 in your account) because if you loan the money at 0% you can take that money and reinvest it. Lets say in a CD or a mutual fund, or a savings account(you wonít get much interest in a savings account) or E-trade for sakes. Now you used exmarks money to buy the equipment free of charge. Now you can take that money you would have used to buy the equipment and invest it and make more money. Get it?

lawnagent
02-20-2012, 02:04 AM
Well over 90% of borrowers do not pay it back in time and get in all kinds of trouble and pay all kinds of extra money. So I personally will never advise someone to do that. These finance companies are rich because so very very few ever pay it off before getting charged all the interest. In case you can tell, I am a Dave Ramsey follower. Sometimes people with finance degrees give his clients good advice and sometimes people with finance degrees give such stupid advice even I can see the errors. I am truly glad you have been able to avoid the bad side but too many people cannot. I am also glad to see you give the investing advice. Buy I would lump the cd in the same category as a savings account for their pitiful amounts of gain.

StihlMechanic
02-20-2012, 02:14 AM
Here's what you do to be debt free. Buy a POS truck for $1000 cash, a trailer for $500, finance every trimmer, mower, blower you can, operate on credit cards as long as you can, then file chapter 13 and laugh.

living Green Property
02-20-2012, 07:20 AM
Well over 90% of borrowers do not pay it back in time and get in all kinds of trouble and pay all kinds of extra money. So I personally will never advise someone to do that. These finance companies are rich because so very very few ever pay it off before getting charged all the interest. In case you can tell, I am a Dave Ramsey follower. Sometimes people with finance degrees give his clients good advice and sometimes people with finance degrees give such stupid advice even I can see the errors. I am truly glad you have been able to avoid the bad side but too many people cannot. I am also glad to see you give the investing advice. Buy I would lump the cd in the same category as a savings account for their pitiful amounts of gain.


Haha yes I agree the CD is not the best investment, I also said E-trade and I in no way would advise anyone who does not know what they are doing to play on there.lol I was just trying to give examples. And u knows the sad thing is I believe you are right about people not paying on time. I mean it really is not hard to make a payment on time. I mean that the problem with America people donít take responsibility for themselfís. And again im saying you donít have to take a loan if you donít like the terms donít sign. And Dave Ramsey has a lot of good points but donít quote me because im not familial with all his programs but from what I have seen he focuses more on personal finance not as much business. credit card debt, a mortgage on home, Personal car loan this is considered ďBad DebtĒ and I agree with dave you should pay for it asap. I understand a lot of people donít have that kind of cash around but he is right you should try paying off your mortgage as fast as you can.

muddywater
02-20-2012, 07:25 AM
True they have fat bank accounts because they are financing equipment. Iím not getting into specific with my finances but I could pay cash for all my loans right now and still operate comfortably. See for me we get a fleet discount from exmark so a lazer z costs me about $8000 new. We put about 650 hours a year on each mower. We only keep them for 2 years. At 2 years they have about 1300 hours on them I then sell them for about $5000 now that means it only costs me $1500 a year to run that Machine. If I break that down to hours that $2.3 an hour. Not to mention we donít have to maintain them that well because we are not holding on to them and if something does happen itís under warranty. If I bought a used one we would have it won out faster and then I would have to replace parts and it would actually be more expensive for us and if we have a break down that would cost me money. we have had motors blow at 900 hours well if it was a 3 year old mower ts out of my pocket and a new motor from experience is $2000 so now im behind. Im not saying every one operates the way we do and each business is different and yes at first buying used equipment is not bad. But as your business grows new equipment is not always a bad thing if you can. Trucks we used to buy used one but now we can buy them for $30,000 run them for 4 years sell them with 80,000 miles for $25,000 so thatís only over $1000 a year it cost us to run them. If I bought one with 80,000 miles for $25,000 and kept it for 4 years it would be worth 15,000 see how now it cost us over $2000 a year. so see how if u need and can afford and have the work for new equipment it pays to buy new equipment. I will buy used like over seeders, bed edgerís and aerator.

Fleet pricing is a joke. I checked into it when I tried to buy 3 new tigers, and it really only saves you 500-1000 off of the average price. There is no difference between a mower with 100 hours and a new one... except several thousand dollars.

So you can buy a work truck for 30k(would have to be a gas engine with work trim package), use it for landscaping for 4 years, and then sell it for 25k? I don't think this is possible. I don't see many 4 year old work truck used in the landscaping industry selling for 25k with 80k miles.

I understand financing when you get started, but I consider it a luxury NOT having to finance anything.

muddywater
02-20-2012, 07:31 AM
Haha yes I agree the CD is not the best investment, I also said E-trade and I in no way would advise anyone who does not know what they are doing to play on there.lol I was just trying to give examples. And u knows the sad thing is I believe you are right about people not paying on time. I mean it really is not hard to make a payment on time. I mean that the problem with America people donít take responsibility for themselfís. And again im saying you donít have to take a loan if you donít like the terms donít sign. And Dave Ramsey has a lot of good points but donít quote me because im not familial with all his programs but from what I have seen he focuses more on personal finance not as much business. credit card debt, a mortgage on home, Personal car loan this is considered ďBad DebtĒ and I agree with dave you should pay for it asap. I understand a lot of people donít have that kind of cash around but he is right you should try paying off your mortgage as fast as you can.

It is such a small percentage you make doing it your way... it just seems stupid if you have the money. I can pay cash and literally save all the money you would make in interest by getting a discounted price for cash.

So all your trucks and mowers are financed?

living Green Property
02-20-2012, 07:37 AM
It is such a small percentage you make doing it your way... it just seems stupid if you have the money. I can pay cash and literally save all the money you would make in interest by getting a discounted price for cash.

So all your trucks and mowers are financed?

Haha no not all of our trucks are financed we have a lot paid for. I am not saying we donít pay cash for stuff but but if I can get cheap interest I will loan it. And if you like paying cash for stuff and you are small enough to do it hey go for it I donít care. But as you grow you will see the major advantage of loaning some money.

living Green Property
02-20-2012, 07:44 AM
Fleet pricing is a joke. I checked into it when I tried to buy 3 new tigers, and it really only saves you 500-1000 off of the average price. There is no difference between a mower with 100 hours and a new one... except several thousand dollars.

So you can buy a work truck for 30k(would have to be a gas engine with work trim package), use it for landscaping for 4 years, and then sell it for 25k? I don't think this is possible. I don't see many 4 year old work truck used in the landscaping industry selling for 25k with 80k miles.

I understand financing when you get started, but I consider it a luxury NOT having to finance anything.

Yes it would be a small percentage if were just talking $1000. But if you are Brickman buying 1.5 million dollarís worth of equipment each year ask them how loaning helps them. Donít forget Brickman loaned almost a billion dollars and they will come to your town and low ball the crap out of you and still make 40% profit. And yes we by Chevrolet 2500 some 4 wheel some 2 wheel. And I can easily no problem sell them for $25,000 I just turned over 2 last month. As long as you keep them looking nice and a lot of times Iíll take them to the body shop and have them repainted or touched up. I donít know why anyone would pay that much for them but people do.lol and like I said everyone has a different business model if you like paying cash go for it.

MR-G
02-20-2012, 08:03 AM
Our business is debt free...has been for past 4 yrs....(in biz 25yrs) its a great feeling to be debt free...btw all equipment is turned over frequently...mowers every 2-3 yrs...handhelds every 1-2....trucks are all 10-12 yrs old and look and run like new...i like buying an old beater and restoring it top to bottom...just finishing a 1991 chevy as i type...my personal finances arent as good..lol....but wife was a stay at home mom for last 10 yrs and was worth every dollar of debt we incurred as both our kids are straight a students and have had a great childhood..lots of fun times they will always remember...now, my wife and i will work on paying down the debt from those years..should only take 3-4 yrs..and again worth every dollar we spent seeing the kids enjoy their young years..but business is debt free.

muddywater
02-20-2012, 10:39 AM
Haha no not all of our trucks are financed we have a lot paid for. I am not saying we donít pay cash for stuff but but if I can get cheap interest I will loan it. And if you like paying cash for stuff and you are small enough to do it hey go for it I donít care. But as you grow you will see the major advantage of loaning some money.

No I really don't see any advantages of loaning money as I grow. I have several crews now, and we make money and save money. Why loan the money if I have plenty of money in the bank? It just doesn't make sense to me.

muddywater
02-20-2012, 11:09 AM
Yes it would be a small percentage if were just talking $1000. But if you are Brickman buying 1.5 million dollarís worth of equipment each year ask them how loaning helps them. Donít forget Brickman loaned almost a billion dollars and they will come to your town and low ball the crap out of you and still make 40% profit. And yes we by Chevrolet 2500 some 4 wheel some 2 wheel. And I can easily no problem sell them for $25,000 I just turned over 2 last month. As long as you keep them looking nice and a lot of times Iíll take them to the body shop and have them repainted or touched up. I donít know why anyone would pay that much for them but people do.lol and like I said everyone has a different business model if you like paying cash go for it.

Where did you get the info on brickman? 40% profit margin? Alot of large companies pay cash for everything. There is no reason to incur interest if you have the cash.

I am very interested in your truck plan. I would like to understand more how you can buy a 30k work truck, use it for 4 years, put 80k miles on it, and sell it for 25k. Do you trade it in on the new truck? I don't see too many 08 model 2500 2wd with 80k bringing any where close to 25k.

I am friends with a gmc dealer and I considered buying a new denali for my wife. If I paid cash. I think it was 54,000, I could trade it in every 6 months and pay $4000 every trade and basically have her driving a new car all the time. But this only works with certain models, like a denali that holds its value really well.

living Green Property
02-20-2012, 12:13 PM
Where did you get the info on brickman? 40% profit margin? Alot of large companies pay cash for everything. There is no reason to incur interest if you have the cash.

I am very interested in your truck plan. I would like to understand more how you can buy a 30k work truck, use it for 4 years, put 80k miles on it, and sell it for 25k. Do you trade it in on the new truck? I don't see too many 08 model 2500 2wd with 80k bringing any where close to 25k.

I am friends with a gmc dealer and I considered buying a new denali for my wife. If I paid cash. I think it was 54,000, I could trade it in every 6 months and pay $4000 every trade and basically have her driving a new car all the time. But this only works with certain models, like a denali that holds its value really well.


Haha I worked at a large accounting firm in Ohio before I did this and we did a lot with large national contractors so I know a lot of inside details about how these companiesís work. And as far as Brickman I am just going to leave it at I dated a district managerís daughter and he liked to talk. lol he said and this is a quote ď I read on those lawn sites all the time guys talking about how a big company is lucky to operate at 20% profit hell last year in my district ran 38% profitĒ then he took another sip of his beer.lol

In 2005 my first year I bought 2 new Chevy 2500 for $29,890 each both were 4 wheel drive standard cab base models. I sold them in 2010 for the one for $18,990 with 76,000 the other for $21,345 with 82,000 miles (I did have a $2600 easy dumper in this one.) I just looked at the receipts.
I do understand the economy tanked and used cars spiked I did get lucky And there were some inflation problems. But still thatís really good it was hardly worth me buying used. I was at the dealer to day actually and the 2500s Iím running are running about $34,000 with being set up for a plow. And im seeing 2008 models for about $23,000 on cars.com so Iím really not that far off.

muddywater
02-20-2012, 12:48 PM
Haha I worked at a large accounting firm in Ohio before I did this and we did a lot with large national contractors so I know a lot of inside details about how these companiesís work. And as far as Brickman I am just going to leave it at I dated a district managerís daughter and he liked to talk. lol he said and this is a quote ď I read on those lawn sites all the time guys talking about how a big company is lucky to operate at 20% profit hell last year in my district ran 38% profitĒ then he took another sip of his beer.lol

In 2005 my first year I bought 2 new Chevy 2500 for $29,890 each both were 4 wheel drive standard cab base models. I sold them in 2010 for the one for $18,990 with 76,000 the other for $21,345 with 82,000 miles (I did have a $2600 easy dumper in this one.) I just looked at the receipts.
I do understand the economy tanked and used cars spiked I did get lucky And there were some inflation problems. But still thatís really good it was hardly worth me buying used. I was at the dealer to day actually and the 2500s Iím running are running about $34,000 with being set up for a plow. And im seeing 2008 models for about $23,000 on cars.com so Iím really not that far off.

Actually, you can find some of their numbers on the internet. They are running no where close to a 40% profit margin. I was hoping you had a link to back that up.

Single cab gas work trucks used for landscaping for 5 years are usually damn near worthless. Hard for me to believe you got 20k a piece for them.

My numbers come to after taxes on a new one, I would imagine your up near 35-38k now. And sell them for 15k after 4 years of landscaping. So it costing alot more than a grand a year for a new truck. It is a 20k depreciation over 4 years.

whiffyspark
07-27-2012, 01:58 PM
Posted via Mobile Device

muddywater
07-27-2012, 09:21 PM
I just lost a bid to brickman. I think they run a 5-10% profit margin which i cannot compete with!

Glenn Lawn Care
07-28-2012, 12:04 AM
I wish I was debt free

keithslawnc
07-28-2012, 06:24 PM
I just lost a bid to brickman. I think they run a 5-10% profit margin which i cannot compete with!

Brickman and ValleyCrest have been kicking my tail on commercial properties for the last three years. Now ValleyCrest is going after high end residential.

Florida Gardener
07-28-2012, 08:12 PM
Brickman and ValleyCrest have been kicking my tail on commercial properties for the last three years. Now ValleyCrest is going after high end residential.

That's a joke. If you see the work they do here, they would be fired just as quick as they got hired. Not sure of your idea of high-end resi, but I look at that as minimum 500/mo
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keithslawnc
07-28-2012, 08:40 PM
That's a joke. If you see the work they do here, they would be fired just as quick as they got hired. Not sure of your idea of high-end resi, but I look at that as minimum 500/mo
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keithslawnc
07-28-2012, 08:44 PM
3 acres of Zoysia, lots of landscaping,32 zone irrigation inspected quarterly,125 yd crushed granite driveway to maintain,creeping fig 25 feet high to be maintained every two weeks,formal garden ect . I bid $1275 per month, they bid $900.00
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Florida Gardener
07-28-2012, 09:00 PM
3 acres of Zoysia, lots of landscaping,32 zone irrigation inspected quarterly,125 yd crushed granite driveway to maintain,creeping fig 25 feet high to be maintained every two weeks,formal garden ect . I bid $1275 per month, they bid $900.00
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wow, not sure of your area...but on a place like that....I would be around 3-K/mo.

keithslawnc
07-28-2012, 09:06 PM
wow, not sure of your area...but on a place like that....I would be around 3-K/mo.

Not gonna happen here. Only $3000 residentially here would be a farm.
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Florida Gardener
07-28-2012, 09:13 PM
Not gonna happen here. Only $3000 residentially here would be a farm.
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well, dont feel bad....they do such poor work you will prob get called back....i recently lost a bid on a 3/4 acre property...10 ft fichus on both sides of property...32 coconut palms to be done 2x/year....lots of other palms, ligustrums, bougie,vines,etc....my bid...2069/mo...the winning bid...900/mo. i did overbid by a couple hundred bucks but that was bc i knew i wasnt going to get it and the guy was a jerk...but i def didnt overbid by 1100.....

GreyFlames
07-29-2012, 09:47 PM
Debt is a tool that needs to be used correctly. If used improperly and you become over leveraged, one bad year can put you out of business. That being said, financing equipment to be able to expand your business can be a great investment.

Always keep in mind you current cash situation, and how it will be in 12 months. Money can always be invested in marketing your company to grow it. You need to know the return on the money you reinvest in your business and compare it to the interest rate of the financing.

APLUS LAWN CARE
02-24-2013, 02:32 PM
My company is debt free. I am a Dave Ramsey nut myself, so that is why. I know of a lot of good companies that run debt free and are extremely sucessful, so I know that it can be done. Now with that being said, I don't disdain the use of credit, especially in the business world. The problem is that 90% or more of people don't know how to use credit properly and end up in trouble. I hope that I can stay debt free in the future, but I do also realize that equipment for this kind of business is really expensive.

205mx
02-24-2013, 08:38 PM
My company is debt free. I am a Dave Ramsey nut myself, so that is why. I know of a lot of good companies that run debt free and are extremely sucessful, so I know that it can be done. Now with that being said, I don't disdain the use of credit, especially in the business world. The problem is that 90% or more of people don't know how to use credit properly and end up in trouble. I hope that I can stay debt free in the future, but I do also realize that equipment for this kind of business is really expensive.

I think Dave said he paid 6 million for his office. I live about 8 miles from his office and 5 from his house and have met him several times.

How's 6mil for expensive equipment
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APLUS LAWN CARE
02-24-2013, 08:57 PM
I think Dave said he paid 6 million for his office. I live about 8 miles from his office and 5 from his house and have met him several times.

How's 6mil for expensive equipment
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No kidding? I would love to meet him. He is my role model. And you do make a good point, there really isn't any need to borrow money for anything. He has a pretty nice house doesn't he?

205mx
02-24-2013, 09:05 PM
Yeah it's about 14,000 square feet

Office is HUGE. Worth 13 million today.

I drive past his house and office (also where he live broadcasts from) every day. You can walk in and watch the show anytime.
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APLUS LAWN CARE
02-24-2013, 09:34 PM
That is awesome. Makes me want to move to Nashville.

APLUS LAWN CARE
02-24-2013, 09:36 PM
So tell me a little more about yourself, just because you have peaked my interest. Are you debt free (personal finance) and debt free (business)?

205mx
02-24-2013, 09:58 PM
Yes except 145,000 on my mortgage.
We moved to Nashville two years ago (Franklin, tn)

My wife has a good job up here.
I started this business as a way to pay for school but it has become our primary income source.

My son is 9 days old and I'm ready to start mowing!

Business equipment value is about 20k.

Wife drives a 2004 f-150 paid 11,700 cash has 107,000 miles as of today

I drive a 2003 Chevy 2500 (120k miles) paid 11k cash

I Have a Kubota 48" (mostly small lawns here) with exception of one 10acre lawn I have lol!!!!

Paid 3800 cash for it two years ago. Its a 2009 model. Had 104 hours when I bought it.

Have a cub cadet commercial 2011 model. Like new. Paid 900 for it cash. 36" deck, walk behind

Have an open trailer. 1400 cash new.

Several stihl hand helds. Usually buy my handhelds new. Usuall if book value is under 1200 NEW, I buy new.
I did buy a used back back blower the other day bv c it was a great buy on a like new piece.

Tons of ather small "tools" rakes etc...

Will be 22 years old in May.

Landmark Lawns, LLC
www.mytnlawn.com

I really think quality used equipment is one of the pillars of success in LCC's
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APLUS LAWN CARE
02-24-2013, 10:09 PM
Yes except 145,000 on my mortgage.
We moved to Nashville two years ago (Franklin, tn)

My wife has a good job up here.
I started this business as a way to pay for school but it has become our primary income source.

My son is 9 days old and I'm ready to start mowing!

Business equipment value is about 20k.

Wife drives a 2004 f-150 paid 11,700 cash has 107,000 miles as of today

I drive a 2003 Chevy 2500 (120k miles) paid 11k cash

I Have a Kubota 48" (mostly small lawns here) with exception of one 10acre lawn I have lol!!!!

Paid 3800 cash for it two years ago. Its a 2009 model. Had 104 hours when I bought it.

Have a cub cadet commercial 2011 model. Like new. Paid 900 for it cash. 36" deck, walk behind

Have an open trailer. 1400 cash new.

Several stihl hand helds. Usually buy my handhelds new. Usuall if book value is under 1200 NEW, I buy new.
I did buy a used back back blower the other day bv c it was a great buy on a like new piece.

Tons of ather small "tools" rakes etc...

Will be 22 years old in May.

Landmark Lawns, LLC
www.mytnlawn.com

I really think quality used equipment is one of the pillars of success in LCC's
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Awesome! You got some pretty good deals on your equipment. You and I are the same age. I have a son that is 9 months old. Having a kid sure does change things. It really makes you look at life differently. I am glad to hear you are doing so well. Hopefully you can pay your mortgage off early like Dave recommends. I'm not debt free personally, but my business is debt free with about $13,000 or so in equipment I am guessing. I am in around $100,000 in debt with my mortgage and student loans but we are working diligently to get it paid off.
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JT25
02-24-2013, 10:21 PM
Congrats on the baby 205MX! I have an 8 month old little girl, kids can change your whole perspective of life! Sounds like you have a nice business going up there. I hope to have a decent setup by the end of this season. This is going to be my first year. And to the OP, I plan to be debt free, in business, and get that way in my personal life.

205mx
02-24-2013, 10:24 PM
It's ok. 2013 I'm hoping to really get rolling. By the end of 2014 I'd like to have enough saved to purchase an NPR landscape truck.

Having a baby rocks!

I'm doing ok but I can't take all the credit. And I'm not trying to brag. I'm no where near where I want to be. But we are working on it.
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JimMarshall
02-25-2013, 08:21 AM
WE are debt free to a point, we have a couple of our trucks financed... but only because they offered 0% financing. Unless there is a 0% financing deal running, we don't finance. Other than that, the only debt we have is revolving debt.

bolc5150
03-02-2013, 10:24 AM
I was almost debt free until my wife had a back fusion and lost her job..But, God has a way..Last year my income grew 100+% and we just landed another nice contract of 6 commercial properties. And yes, I am looking to expand so I am buying a used box truck that I think I can pay off in 18 month's along with hiring an employee. Raising 3 kids was tough....so I had to finance some stuff. I used to think new is the way to go, but now except for my main mowers i buy used. I try to keep any finance down to 36 month's or less. I try and use cash when I can, but I have to watch what I pay with it due to if you claim it on taxes. I started with 0 and now I have a legitament company that has really good exposure and a good client base.

32vld
03-02-2013, 08:56 PM
Your wife's illness put you in a bind. I do know your story. Though it appears you have enough cash flow that if things slow down you will still make your payments.

When a business has enough income that to finance a truck, mower, whatever is ok if the economy took an extra big dump and a business lost 25% of their business and still make the payments then it would be safe to feel that a loan on a new truck would be a low risk to take.

Thing is many people specially when starting out do not have the volume of income that if they lost 25% cash flow they would go belly up.

The problem is most people are to easily willing to take risks that are not wise.

My view is avoiding interest payments is always a huge savings.
The first car I bought cost $7,000. I paid the bank $9,000.

Compound interest is a wonderful thing when you are the one earning it instead of paying it.

I have knew of printing business that had millions of dollars in sales that grew and bought all their equipment with cash that they had said aside. Their last press cost a million dollars.

This business owned everything including their building. Not having to pay off any loans will can make the difference when the economy goes bad.

205mx
03-02-2013, 10:23 PM
^^^^ and THAT much better when the economy is in the 1990's!

weeze
03-02-2013, 11:11 PM
i think everyone is in debt. if you pay insurance each month you are in debt to the insurance company. if you have a power bill you are in debt to them. same goes for water, gas, cable, cell phone, etc. :laugh:

it used to be easier to live debt free. my grandparents did it. they bought their house for 20k in cash. that house now is close to $150k. noone can really save that much money to pay for a house in cash these days.

it's the same way with trucks or cars. you used to could buy a decent truck for $5k and you could save up and buy it in cash. these days if you want a decent used truck they cost about $12-$15k. i don't even bother with used anymore because they cost so much. a brand new one is $20k. only 5 thousand more.

as for me i'm debt free except for my truck. i owe $9k on it.

or are we talking business debt here or personal debt? my truck is my personal truck. so my business has no debt at all. i'm sure most everyone on here has a mortgage debt personally.

Hope Landscaping
03-02-2013, 11:37 PM
My business is debt free! I'm growing slow but I'm in it for the long run. No debt = no risk.

205mx
03-03-2013, 09:26 AM
i think everyone is in debt. if you pay insurance each month you are in debt to the insurance company. if you have a power bill you are in debt to them. same goes for water, gas, cable, cell phone, etc. :laugh:

it used to be easier to live debt free. my grandparents did it. they bought their house for 20k in cash. that house now is close to $150k. noone can really save that much money to pay for a house in cash these days.

it's the same way with trucks or cars. you used to could buy a decent truck for $5k and you could save up and buy it in cash. these days if you want a decent used truck they cost about $12-$15k. i don't even bother with used anymore because they cost so much. a brand new one is $20k. only 5 thousand more.

as for me i'm debt free except for my truck. i owe $9k on it.

or are we talking business debt here or personal debt? my truck is my personal truck. so my business has no debt at all. i'm sure most everyone on here has a mortgage debt personally.


Uhhh.....

No. Owing the gas company $60 is not debt. You used their service and so you owe them for the services and or product. That's not debt.

Also, I just bought my wife a 2004 f150. 101,000 miles. Runs perfect. Beautiful Bright red, 4 door. Sun roof. XLT. Fiberglass bed topper. KBB is 12,700 I paid 10,000 cash. That's HALF of what a new "20k" truck is. Which would HAVE to be pre owned or complete standard cab base model.

I buy all my vehicles like this. Drive them a few years, then sell and get something else. It's fun and exciting to have a new car often. And no, 100,000 miles on a 5.4 ford doesn't scare me. I have a 6.0 chevy with 136,000. Minimal issues.
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32vld
03-03-2013, 12:27 PM
i think everyone is in debt. if you pay insurance each month you are in debt to the insurance company. if you have a power bill you are in debt to them. same goes for water, gas, cable, cell phone, etc. :laugh:

it used to be easier to live debt free. my grandparents did it. they bought their house for 20k in cash. that house now is close to $150k. noone can really save that much money to pay for a house in cash these days.

it's the same way with trucks or cars. you used to could buy a decent truck for $5k and you could save up and buy it in cash. these days if you want a decent used truck they cost about $12-$15k. i don't even bother with used anymore because they cost so much. a brand new one is $20k. only 5 thousand more.

as for me i'm debt free except for my truck. i owe $9k on it.

or are we talking business debt here or personal debt? my truck is my personal truck. so my business has no debt at all. i'm sure most everyone on here has a mortgage debt personally.

Utility, phone, insurance, expenses. They are not optional loans to make purchases.

With O% finanace better to leave one's money in the bank then pay cash for a new truck.

205mx
03-03-2013, 12:30 PM
Utility, phone, insurance, expenses. They are not optional loans to make purchases.

With O% finanace better to leave one's money in the bank then pay cash for a new truck.

Right. The problem with 0% is that it tricks you in to spending MORE than you otherwise should if you understand what I'm saying.

FI. If your business makes 40k NET PROFIT, a 10,000 mower next year is outrageous. But because it's 0% people "might as well use someone else's money" when really all it does is cause you to over spend.
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weeze
03-03-2013, 03:20 PM
technically it's not debt you are right. it's not a loan but it's something you have to pay each month though so it's the same difference. you are still making payments.

basically you are in debt month to month to the people that send you bills. they are your boss. you work for them. it's all a matter of perspective.

the only total debt/money freedom is to not owe or have to pay anyone any money of any kind for anything ever. doesn't exist unless you live in the woods and kill your own food and build your own house and such like they do on tv. :laugh:

you have to live off the grid to acheive this and there are actually people that do this in our world.

as for paying 10k cash for a truck and then doing it again so often that is alot of wasted money. you'll spend 40k in cash on 4 different trucks while i'll still be driving the 20k truck with no payments. if you buy a truck new it will last you 15-20 years if you take care of it. i would suggest a toyota though not a ford. a ford may not make it that long.

205mx
03-03-2013, 03:24 PM
technically it's not debt you are right. it's not a loan but it's something you have to pay each month though so it's the same difference. you are still making payments.

as for paying 10k cash for a truck and then doing it again so often that is alot of wasted money. you'll spend 40k in cash on 4 different trucks while i'll still be driving the 20k truck with no payments. if you buy a truck new it will last you 15-20 years if you take care of it. i would suggest a toyota though not a ford. a ford may not make it that long.
So you are in debt to grocery store in your world?
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weeze
03-03-2013, 03:27 PM
you have to eat don't you?

or you could go shoot a deer but you still have to buy ammo and a gun which costs money. :laugh:

205mx
03-03-2013, 03:38 PM
you have to eat don't you?

or you could go shoot a deer but you still have to buy ammo and a gun which costs money. :laugh:


So ******ed. If things didn't cost you wouldn't work in the first place
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JimMarshall
03-04-2013, 12:26 PM
Right. The problem with 0% is that it tricks you in to spending MORE than you otherwise should if you understand what I'm saying.

FI. If your business makes 40k NET PROFIT, a 10,000 mower next year is outrageous. But because it's 0% people "might as well use someone else's money" when really all it does is cause you to over spend.
Posted via Mobile Device

how does it trick you into spending more??

weeze
03-04-2013, 12:30 PM
So ******ed. If things didn't cost you wouldn't work in the first place
Posted via Mobile Device

well not entirely true. you would still have to work. you just wouldn't be getting paid. you'd have to build a house yourself, cut firewood to stay warm, skin a deere so you could eat, plant a garden, etc.

205mx
03-04-2013, 12:40 PM
how does it trick you into spending more??

Because if it weren't for financing most of us wouldn't spend $20,000-$40,000 on a truck.
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205mx
03-04-2013, 12:40 PM
well not entirely true. you would still have to work. you just wouldn't be getting paid. you'd have to build a house yourself, cut firewood to stay warm, skin a deere so you could eat, plant a garden, etc.

Holy smokes
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JimMarshall
03-04-2013, 01:55 PM
Because if it weren't for financing most of us wouldn't spend $20,000-$40,000 on a truck.
Posted via Mobile Device

A 40 k truck costs 40 k whether you pay cash or finance at 0 percent. If someone is buying more than they can afford, they haven't been tricked, theyre an idiot. And since when can you buy a new truck for 20 grand?

205mx
03-04-2013, 04:27 PM
A 40 k truck costs 40 k whether you pay cash or finance at 0 percent. If someone is buying more than they can afford, they haven't been tricked, theyre an idiot. And since when can you buy a new truck for 20 grand?

Right this is what I'm saying. If I restrict myself personally to cash, I'm only buying for around 10k. If I'm financing, I'm more likely to go for a more expensive item. And I don't know where you can get a new truck for 20k! Lol.

I meant new to me ;-)

Again this is all opinion and personal experiences.

weeze
03-04-2013, 06:00 PM
my truck was 20k tax and all brand new. payments of $350 a month.

you don't need a 40k diesel truck to mow grass. that's complete overkill.

i know this is where everyone goes off about how they pull bulldozers on flat bed trailers and do snow removal and yadda yadda yadda. none of that is lawn care. it's a different area altogether. construction and snow plowing are not the same thing as cutting grass. just because you cut grass too doesn't make it part of the same industry. just clairifying that. not all of us do snow removal or construction or hardscaping jobs.

even if you are doing a complete lawn renovation the place where you buy the grass will deliver it to the site for you.

205mx
03-04-2013, 06:45 PM
my truck was 20k tax and all brand new. payments of $350 a month.

you don't need a 40k diesel truck to mow grass. that's complete overkill.

i know this is where everyone goes off about how they pull bulldozers on flat bed trailers and do snow removal and yadda yadda yadda. none of that is lawn care. it's a different area altogether. construction and snow plowing are not the same thing as cutting grass. just because you cut grass too doesn't make it part of the same industry. just clairifying that. not all of us do snow removal or construction or hardscaping jobs.

even if you are doing a complete lawn renovation the place where you buy the grass will deliver it to the site for you.


X 2
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32vld
03-04-2013, 08:29 PM
A 40 k truck costs 40 k whether you pay cash or finance at 0 percent. If someone is buying more than they can afford, they haven't been tricked, theyre an idiot. And since when can you buy a new truck for 20 grand?

$40 G is $40 G unless there is interest on the loan. Then that $40 G truck cost $50 G.

April 2011 my brother bought a Silverado 1500 reg cab, 4.8 v8, 4wd, $26,000.

205mx
03-04-2013, 08:38 PM
$40 G is $40 G unless there is interest on the loan. Then that $40 G truck cost $50 G.

April 2011 my brother bought a Silverado 1500 reg cab, 4.8 v8, 4wd, $26,000.

Y'all are totally missing the point.
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JimMarshall
03-04-2013, 09:03 PM
my truck was 20k tax and all brand new. payments of $350 a month.

you don't need a 40k diesel truck to mow grass. that's complete overkill.

i know this is where everyone goes off about how they pull bulldozers on flat bed trailers and do snow removal and yadda yadda yadda. none of that is lawn care. it's a different area altogether. construction and snow plowing are not the same thing as cutting grass. just because you cut grass too doesn't make it part of the same industry. just clairifying that. not all of us do snow removal or construction or hardscaping jobs.

even if you are doing a complete lawn renovation the place where you buy the grass will deliver it to the site for you.

My mowing trucks average 20-25 thousand miles a yr, all of it pulling several thousand lbs. that is absolutely an environment that is suited for a diesel.

$40 G is $40 G unless there is interest on the loan. Then that $40 G truck cost $50 G.

April 2011 my brother bought a Silverado 1500 reg cab, 4.8 v8, 4wd, $26,000.

I would never buy a 1500 for work.

muddywater
03-04-2013, 09:25 PM
Y'all are totally missing the point.
Posted via Mobile Device

I agree with your point, it is harder to lay down the cash on big purchases when you dont finance. It makes you really evaluate your decisions, because of how hard it is to accumalate cash.

I run 4-5 crews and everything is paid off, from my 4 mini skids, 30k taki, isuzu nprs, 5500s, 5 vrides.. hell even my office/shop is paid off. It really makes things a little less stressful.

205mx
03-04-2013, 09:37 PM
I agree with your point, it is harder to lay down the cash on big purchases when you dont finance. It makes you really evaluate your decisions, because of how hard it is to accumalate cash.

I run 4-5 crews and everything is paid off, from my 4 mini skids, 30k taki, isuzu nprs, 5500s, 5 vrides.. hell even my office/shop is paid off. It really makes things a little less stressful.

Right and for those who argue cash flow... The arguement doesn't really have any substance
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205mx
03-04-2013, 09:38 PM
My mowing trucks average 20-25 thousand miles a yr, all of it pulling several thousand lbs. that is absolutely an environment that is suited for a diesel.



I would never buy a 1500 for work.

I agree you do need at least a 2500 for mowing and mulch.

And if you are so big why not use a landscaping truck ?
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dlandscaping
03-04-2013, 09:59 PM
There should of been an extra few words in the title of this thread. It should have said those with a business operation with employees and did you or how did you use debt to grow your business. This site has been completely over run with weekend warriors and high school kids who "pay cash for my used mower." In order to grow in this industry where profit margins are relatively small one usually has to borrow. There is a balancing act between how much debt one can incur and how much is needed to grow. Why respond to a thread about using debt in your business if you are in highschool and dont have any credit?

JB1
03-04-2013, 10:03 PM
There should of been an extra few words in the title of this thread. It should have said those with a business operation with employees and did you or how did you use debt to grow your business. This site has been completely over run with weekend warriors and high school kids who "pay cash for my used mower." In order to grow in this industry where profit margins are relatively small one usually has to borrow. There is a balancing act between how much debt one can incur and how much is needed to grow. Why respond to a thread about using debt in your business if you are in highschool and dont have any credit?



Your right but it is pretty entertaining reading.

205mx
03-04-2013, 10:16 PM
There should of been an extra few words in the title of this thread. It should have said those with a business operation with employees and did you or how did you use debt to grow your business. This site has been completely over run with weekend warriors and high school kids who "pay cash for my used mower." In order to grow in this industry where profit margins are relatively small one usually has to borrow. There is a balancing act between how much debt one can incur and how much is needed to grow. Why respond to a thread about using debt in your business if you are in highschool and dont have any credit?

I'm not really a weekend warrior. I have 43 weekly accounts. Not a lot really but I think you saying debt is required in this business is silly at best.

Not saying its wrong or anything. Nobody is mad at anyone for having debt. Just two very different business models. Used equipment doesnt make someone any less professional or cause poor workmanship.

I buy equipments in the winter when those weekend warriors can no longer afford theirs.

When I go to purchase a shop I'll more than likely have to borrow. But borrowing for mowers and even trucks in some cases is silly.
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205mx
03-04-2013, 10:18 PM
Your right but it is pretty entertaining reading.

Right except I'm 22. Married. $170,000 house. 3 week old son. 43 accounts. Own a home in the wealthiest county in Tennessee and 17th wealthiest in the nation. My wife and I support this at our age without family assistance. Even with my son. Jesus some of y'all are dicks
I live 350 miles from any family. It's tough sometimes but I moved to an area with a better economy for the better.

100% of business vehicle repossessions happen to vehicles that have a 'note' on them.
[]Posted via Mobile Device[/i]

205mx
03-04-2013, 10:28 PM
There should of been an extra few words in the title of this thread. It should have said those with a business operation with employees and did you or how did you use debt to grow your business. This site has been completely over run with weekend warriors and high school kids who "pay cash for my used mower." In order to grow in this industry where profit margins are relatively small one usually has to borrow. There is a balancing act between how much debt one can incur and how much is needed to grow. Why respond to a thread about using debt in your business if you are in highschool and dont have any credit?

Muddy runs 4 crews without debt. So what are talking about?
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JB1
03-04-2013, 10:30 PM
Right except I'm 22. Married. $170,000 house. 3 week old son. 43 accounts. Own a home in the wealthiest county in Tennessee and 17th wealthiest in the nation. My wife and I support this at our age without family assistance. Even with my son. Jesus some of y'all are dicks
I live 350 miles from any family. It's tough sometimes but I moved to an area with a better economy for the better.

100% of business vehicle repossessions happen to vehicles that have a 'note' on them.
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Well you are doing pretty good then to have all that and be debt free.

205mx
03-04-2013, 10:32 PM
Well you are doing pretty good then to have all that and be debt free.

I owe 137 on the house so not all debt free.

But yes all else. Completely debt free. I've just been paying attention since I turned 20. Reading a lot of finance books. And avoiding the mistakes I've seen my father make

We have two vehicles. I have a 2003 Chevy 2500 for work. My wife has a 2004 F150. It can serve as a back up if my truck has an issue. I'm currently saving for a landscape truck which I have projections to purchase at the end of 2014.

The f150 is worth about 12,000
My truck is worth about 10,000. (beat up a little more from work)

We just save up and buy with cash. She started with a little ole Hyundai and I started with a $1200 dodge Dakota.

So it is insulting when yall say it's entertaining when I'm working as hard as I can to provide my family a great income and stability of a lifestyle with minimal payment liabilities.

On one hand you say that I'm doing pretty good, then I share my experiences and what I've been doing on an opinion forum, and get blasted as some fly by night meat head.
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205mx
03-04-2013, 10:47 PM
Understand that I'm not saying its bad or wrong of anyone to use debt to help them grow.
But the other side of it is that you are blasting me for choosing not to use debt.

The way I see it there are 4 groups

1) companies who use debt and fail because of the high volume of payment liabilities

2).*companies that use debt as a tool and properly grow their business. While using a moderate level of risk they are able to grow at a somewhat accelerated rate.

3) companies who don't have credit thus don't borrow. They then claim the cash only theory

4) those who choose not to use debt to limit risk

It's very similar to the Stick edger vs trimmer debate ;-)
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weeze
03-04-2013, 11:14 PM
My mowing trucks average 20-25 thousand miles a yr, all of it pulling several thousand lbs. that is absolutely an environment that is suited for a diesel.

my truck can pull up to 6000lbs. a ztr mower and trailer only weigh about 2000lbs. my truck is 4cyl. there's no need for any more power.

as far as mileage well you know how long toyotas last so no need to defend that. 500k miles easy.

KS_Grasscutter
03-04-2013, 11:52 PM
my truck can pull up to 6000lbs. a ztr mower and trailer only weigh about 2000lbs. my truck is 4cyl. there's no need for any more power.

as far as mileage well you know how long toyotas last so no need to defend that. 500k miles easy.

I beg to differ. I mow 10+ yards a day, they all get bagged, in the spring I haul over a ton (a real ton, not just "a whole bunch") of grass clippings to the landfill daily. I drag around a 16' trailer with a few mowers on it. Find a way for me to do that efficiently with a 4 cyl and I will buy one.

weeze
03-04-2013, 11:54 PM
are you solo? do you really need 2 large mowers? i carry 2 mowers rarely but they are a ztr and a 21" pushmower. why such a big trailer if you are solo? i never bag grass. a ton i could still pull if i needed to.

i think you aren't solo so what i do doesn't apply to a non solo company.

if you are solo i would get a smaller trailer and dump grass clippings on site and get rid of all the dead weight. here you can put grass clippings on the curb and the city will pick it up for free. i never mess with bagging though.

KS_Grasscutter
03-05-2013, 12:18 AM
are you solo? do you really need 2 large mowers? i carry 2 mowers rarely but they are a ztr and a 21" pushmower. why such a big trailer if you are solo? i never bag grass. a ton i could still pull if i needed to.

i think you aren't solo so what i do doesn't apply to a non solo company.

if you are solo i would get a smaller trailer and dump grass clippings on site and get rid of all the dead weight. here you can put grass clippings on the curb and the city will pick it up for free. i never mess with bagging though.

Yes I am solo, all mowers are necessary due to varying sizes and types of lawns. No where to dump onsite, if I dumped on the curb I would probably be arrested lol. If I didn't mess with bagging at all I would lose 3/4 of my customers.

As for being debt free, no. I owe on a couple items, and plan to continue financing 2 items at a time until I have built up the cash flow necessary to pay cash for everything I want. I would prefer to pay cash for everything but unfortunately that does not work for me at this point.

205mx
03-05-2013, 10:45 AM
Yes I am solo, all mowers are necessary due to varying sizes and types of lawns. No where to dump onsite, if I dumped on the curb I would probably be arrested lol. If I didn't mess with bagging at all I would lose 3/4 of my customers.

As for being debt free, no. I owe on a couple items, and plan to continue financing 2 items at a time until I have built up the cash flow necessary to pay cash for everything I want. I would prefer to pay cash for everything but unfortunately that does not work for me at this point.

This is a good way to manage your debt amount. Budget the item in. Well done.

And Jason, I lay out a ton of mulch. (I service a fast food joint that requires a good amount twice a year) so I really do need a 3/4 ton. But that's NOT saying you do.
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JimMarshall
03-05-2013, 11:06 AM
Apparently my message got deleted... not sure why. Seriously, what are the benefits of a landscaping truck? Never really looked into one. I don't like to fix things that arent broken.

205mx
03-05-2013, 11:08 AM
Just look at them. There are obvious benefits to them. They dont replace a truck and trailer but sure are easier for a couple workers to maneuver
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JimMarshall
03-05-2013, 11:09 AM
my truck can pull up to 6000lbs. a ztr mower and trailer only weigh about 2000lbs. my truck is 4cyl. there's no need for any more power.

as far as mileage well you know how long toyotas last so no need to defend that. 500k miles easy.

My truck hauls a 16 foot trailer, 61 inch ztr, 2 48 inch walkbehinds, a 21 inch push, assorted trimmers and blowers, and enough tools to repair any common occurance. Way too much for a 4 cyl

JimMarshall
03-05-2013, 11:11 AM
Just look at them. There are obvious benefits to them. They dont replace a truck and trailer but sure are easier for a couple workers to maneuver
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So benefits are easier to move and more advertising space on the side of the thing? am I missing anything?

205mx
03-05-2013, 11:12 AM
Right and then small applications to your business specifically. But nobody knows your business better than you.
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JimMarshall
03-05-2013, 11:39 AM
Right and then small applications to your business specifically. But nobody knows your business better than you.
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I think I will stick with what I have. Guys are used to it, and it has worked well so far.

meets1
03-05-2013, 12:51 PM
If you guys can afford $40k plus purchase and have extra money in the bank I must be doing something wrong. Wife, 3 kids, private school, employees, trucks, equipment, 6500 sq ft shop, house. I have no toys, but we live a good life. Being debt free would be good but I didnt have 25oK laying around for a shop. When I buy new mower I will use there finance option for 2-3 years with 0% interest - why not. Sure trimmers, small stuff yes pay for.

WillisLawnCare
03-05-2013, 02:11 PM
Debt Free here, of course just starting and only one client.

Hope I can end the season with 15 regular residential accounts that I push Mow and do minor landscaping with my dads mower/trimmer. I have a full-time job also so while I work a 12-8 shift, 15 will be the most I can handle by myself in the AM and on weekends. figuring 1 a day during the week and 4 a day on sat/sun.

Allowing about 350 for advertising. $60 for 1000 business cards off vista print, along with a holder to put in my moms office, $200 for 500 door hangers that I will manually walk and put on houses this weekend or next. The rest for website/domain name (gf will be webmaster).

Hopefully by the end of season I can get a 48-in walk behind to decrease time spent on each yard, as well as anice set up for the bed of my truck.

32vld
03-05-2013, 08:07 PM
My mowing trucks average 20-25 thousand miles a yr, all of it pulling several thousand lbs. that is absolutely an environment that is suited for a diesel.



I would never buy a 1500 for work.

Not everyone hauls that much weight or tows that much weight.

205mx
03-05-2013, 08:28 PM
People we need to understand that everyone's business model is different.
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meets1
03-05-2013, 09:20 PM
Business model yes. Also how about those that inherited money? Those that may have other business ventures on the side? How about your wife? Alot of things come into play. THere is a 22 year old kid here that used to help us part time. Daddy farms. He claims he saved close to $780K thru high school and 2 yr college - he just bought a dozer, excavator, 2 payloaders, a 2 trucks, 2 sidedumps and 2 lowboys. I told him I paid you too much - he has no debt - bottom line DADDY! There going to start playing in the dirt.

weeze
03-05-2013, 10:17 PM
wow with a dad like that why would you even work at all? :laugh:

205mx
03-05-2013, 10:44 PM
Business model yes. Also how about those that inherited money? Those that may have other business ventures on the side? How about your wife? Alot of things come into play. THere is a 22 year old kid here that used to help us part time. Daddy farms. He claims he saved close to $780K thru high school and 2 yr college - he just bought a dozer, excavator, 2 payloaders, a 2 trucks, 2 sidedumps and 2 lowboys. I told him I paid you too much - he has no debt - bottom line DADDY! There going to start playing in the dirt.

Right. Many factors
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meets1
03-06-2013, 08:52 AM
Why work with a dad like that - well he is a farmer. No matter the drought ect he needs ductions or pay in. He bought the stuff. That kid stay on farm in one fashion or other and life is good. He just left our local honda dealer last week with a new $16K sled cuz he was going to the montana area (cook city) I think to go sledding. Why was I there - to get a few shear pins for our honda blower. Me just a little guy!

LindblomRJ
03-06-2013, 10:01 AM
Sure, you can operate debt free, if you intent to grow or up productivity debt can sustain or expand while helping to maintain decent cash flow. If managed debt can be a great tool.

Playing with dad's money is a sure fire way to go broke in 5 years. However, starting up debt free is a great way to get started.

zackvbra
03-06-2013, 10:45 AM
This is my 4th year, and I have yet to be in debt. The only thing I have had financed is my mower and truck. Still paying on the truck, just paid the mower off a couple months ago. :)

Patriot Services
03-06-2013, 10:52 AM
Sure, you can operate debt free, if you intent to grow or up productivity debt can sustain or expand while helping to maintain decent cash flow. If managed debt can be a great tool.

Playing with dad's money is a sure fire way to go broke in 5 years. However, starting up debt free is a great way to get started.

This is where a revolving line of credit rules. Not talking credit card here. You borrow what you need, when you need it. Usually at far more favorable rates than a straight up loan that you are paying interest on whether the money is in play or not.
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205mx
03-06-2013, 11:38 AM
This is my 4th year, and I have yet to be in debt. The only thing I have had financed is my mower and truck. Still paying on the truck, just paid the mower off a couple months ago. :)

LOL
I have no debt except for the debt I have'


Congrats payin off the mower I'm just joshin ya
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zackvbra
03-06-2013, 11:48 AM
My definition of debt is you are late on a payment on something, and it just keeps piling up. If you make your payments on time, thats not debt, in my book.

205mx
03-06-2013, 11:50 AM
What book is that?

JK! That's an interesting take really. Payment don't necessarily make it debt I guess. Interesting take man. With a truck it's just making payments. Big difference in that and credit cards. Nice way of looking at things, really.

Tyler
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LindblomRJ
03-06-2013, 12:13 PM
A revolving line is handy. If you can finance at slow rate for something large, a truck, large equipment, or trucks.
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precisionlawnandlandscape
03-06-2013, 01:16 PM
Guess i will chime in with my $.02 worth. 1st off, anyone who says "all debt is dumb", is well, for lack of better words, "DUMB". Yes, if your growing a "lawn care" business, you shouldn't have a problem growing somewhat debt free. however, and i don't mean to piss anyone off here, if you try to grow a "real" business, and by this i mean, manufacturing company, retail store, excavating company, all of which require MAJOR investments of cash, to both start and to maintain. This simply is not going to happen strictly on cash only. If you try to do any of the above on cash alone, you will never grow to any size in your lifetime. Now there are probably a FEW exceptions to this, but very few.

Next thing, i will use an example that i witnessed first hand. My grandparents are very wealthy (in the millions). They bought a motorhome about 5 years ago. Price tag, a cool $495,000. They paid $395,000 in cash and financed the other $100,000. I immediately asked her, why would you do that, you have the other $100,000 in the bank. She said that's how i got all my money, by being smart and knowing when to pay cash and when to finance. I said, please explain then!!! She said we financed the other $100,000 at 0% interest for 12 months. That is a payment of $8,333.34, we then pay that with our credit card each month (which has a $50,000 limit). When we get the bill we pay it off right away, so no interest there. I said why, what have you gained by doing this. She said our card pays 5% cash back, so we receive a little over $416 each month from the credit card company. She said "easiest $416 a month i ever made" Now who looks like the dummy?

Patriot Services
03-06-2013, 01:32 PM
Guess i will chime in with my $.02 worth. 1st off, anyone who says "all debt is dumb", is well, for lack of better words, "DUMB". Yes, if your growing a "lawn care" business, you shouldn't have a problem growing somewhat debt free. however, and i don't mean to piss anyone off here, if you try to grow a "real" business, and by this i mean, manufacturing company, retail store, excavating company, all of which require MAJOR investments of cash, to both start and to maintain. This simply is not going to happen strictly on cash only. If you try to do any of the above on cash alone, you will never grow to any size in your lifetime. Now there are probably a FEW exceptions to this, but very few.

Next thing, i will use an example that i witnessed first hand. My grandparents are very wealthy (in the millions). They bought a motorhome about 5 years ago. Price tag, a cool $495,000. They paid $395,000 in cash and financed the other $100,000. I immediately asked her, why would you do that, you have the other $100,000 in the bank. She said that's how i got all my money, by being smart and knowing when to pay cash and when to finance. I said, please explain then!!! She said we financed the other $100,000 at 0% interest for 12 months. That is a payment of $8,333.34, we then pay that with our credit card each month (which has a $50,000 limit). When we get the bill we pay it off right away, so no interest there. I said why, what have you gained by doing this. She said our card pays 5% cash back, so we receive a little over $416 each month from the credit card company. She said "easiest $416 a month i ever made" Now who looks like the dummy?

A full blown gem of advice. BOA is currently one of a handful of companies offering great cc incentives. Paying off full at end of month eliminates the interest. The incentives are cash back on fuel and other purchases. Just don't forget to make that payment on time. This helps with your cash on hand throughout the month. It can be a real juggling game at times.
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32vld
03-06-2013, 04:28 PM
Next thing, i will use an example that i witnessed first hand. My grandparents are very wealthy (in the millions). They bought a motorhome about 5 years ago. Price tag, a cool $495,000. They paid $395,000 in cash and financed the other $100,000. I immediately asked her, why would you do that, you have the other $100,000 in the bank. She said that's how i got all my money, by being smart and knowing when to pay cash and when to finance. I said, please explain then!!! She said we financed the other $100,000 at 0% interest for 12 months. That is a payment of $8,333.34, we then pay that with our credit card each month (which has a $50,000 limit). When we get the bill we pay it off right away, so no interest there. I said why, what have you gained by doing this. She said our card pays 5% cash back, so we receive a little over $416 each month from the credit card company. She said "easiest $416 a month i ever made" Now who looks like the dummy?


The dummy is the person that reads this and forgets grandma has the wealth to pay off this loan in cash tomorrow. So grandma can work the system.

Most business owners are borrowing money and counting there never will be a drop off in profits bad enough that they will be out of business if their income drops off too much which will cause them to default on their loans.

I have seen businesses grow and reach millions of dollars in sales and buy million dollar machines without using credit.

Rate of growth and the costs to get there vs rate of growth in net profit.

People in personal life as well in business forget the difference between need and want.

Doubling sales is a want, not a need.

Trading in a truck every 4 years is a want, not a need.

That is the problem with credit use creating problems. People use credit when it is not a need.

Truck died, 10 years old, 275,000 miles, everything is worn out and the expense is so high the truck is not worth fixing.

With no truck, no cash to buy a truck, the LCO has to get a loan. This is a need not a want.

precisionlawnandlandscape
03-06-2013, 05:58 PM
[QUOTE=32vld;4697709]The dummy is the person that reads this and forgets grandma has the wealth to pay off this loan in cash tomorrow. So grandma can work the system.


You are correct, grandma has the money "NOW" to pay off said loan, but "NOT ALWAYS". Grandma and Grandpa got to be this wealthy by being smart with the money they made through the years, which required both paying cash and borrowing money, when it made sense. My grandparents told me once, "It's not how much you make, but what you do with what you make". My grandparents never owned a business and never inherited one dime from anyone, yet were able to amass a small fortune. All of which came by being smart with what they made. The point i was trying to make is, if you go back to the beginning of this thead people were saying "Cash is King", "I only use cash, never credit", "I never use credit for anything" etc.... All i was trying to point out is, credit has advantages, "IF USED CORRECTLY"



I have seen businesses grow and reach millions of dollars in sales and buy million dollar machines without using credit.




I agree with this statement also, but as i said earlier, these are far and few between. Not saying it is never possible, but not very likely in most high capital type businesses. My best friend owns a very successful pallet company. Started out with $20,000 in cash and $30,000 on credit cards. This was when he was 19 years old. No help from anyone, no knowledge of the business, no connections, no experience in the industry. 18 years later, 2 locations, 32 employees, 4 semi trucks, over 100 trailers, 2 mulching operations complete with tub grinders, coloring machines, walking floor trailers, around 1.5 million in equipment etc.... 2 years ago bought a piece of real estate to move locations, 1.2 million, payed cash. Guess what though, started with that $30,000 in credit and continued to use credit till about 7 or 8 years ago. Without it, he would not be anywhere near the level he is today. This is part of being an "entreupenuer", you take chances. Sometimes you win, sometimes you loose. Sometimes credit is needed to take advantage of that big contract or that big opportunity. If you wait till you have "cash in hand", it may be too late. As stated earlier, it just depends on the person. Want to get a good in depth look at how some very smart people made it big, watch the Discovery channel documetary "The Men Who Built America". Very interesting piece on the Vanderbilts, Rockefellers, Carnegie, J.P. Morgan and Henry Ford, lot of credit used by those guys starting out, didn't turn out too bad wouldn't you say.

Patriot Services
03-06-2013, 06:11 PM
It can be scaled down. Nobody said it was only for expensive purchases. Cash back perks apply to every purchase. It just gets a lot more noticeable the larger the purchase. Additionally it stresses the need to maintain good credit.
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newguy123
03-06-2013, 06:31 PM
Guess i will chime in with my $.02 worth. 1st off, anyone who says "all debt is dumb", is well, for lack of better words, "DUMB". Yes, if your growing a "lawn care" business, you shouldn't have a problem growing somewhat debt free. however, and i don't mean to piss anyone off here, if you try to grow a "real" business, and by this i mean, manufacturing company, retail store, excavating company, all of which require MAJOR investments of cash, to both start and to maintain. This simply is not going to happen strictly on cash only. If you try to do any of the above on cash alone, you will never grow to any size in your lifetime. Now there are probably a FEW exceptions to this, but very few.

Next thing, i will use an example that i witnessed first hand. My grandparents are very wealthy (in the millions). They bought a motorhome about 5 years ago. Price tag, a cool $495,000. They paid $395,000 in cash and financed the other $100,000. I immediately asked her, why would you do that, you have the other $100,000 in the bank. She said that's how i got all my money, by being smart and knowing when to pay cash and when to finance. I said, please explain then!!! She said we financed the other $100,000 at 0% interest for 12 months. That is a payment of $8,333.34, we then pay that with our credit card each month (which has a $50,000 limit). When we get the bill we pay it off right away, so no interest there. I said why, what have you gained by doing this. She said our card pays 5% cash back, so we receive a little over $416 each month from the credit card company. She said "easiest $416 a month i ever made" Now who looks like the dummy?

Although your Grandma's story is pretty awesome...most businesses do not allow someone to pay debt with another form of debt (i.e., pay motor home debt with credit card.)

Their situation sounds quite unique due to their income level/wealth. I might be assuming, but most people couldn't do that due to the above statement I made.

precisionlawnandlandscape
03-06-2013, 07:13 PM
[QUOTE=newguy123;4697848]Although your Grandma's story is pretty awesome...most businesses do not allow someone to pay debt with another form of debt (i.e., pay motor home debt with credit card.)

Sure they do. Buy new truck at 0% interest. Let's say $30,000, 60 equal payments at $500 each. Let's say you had the $30,000 already in the bank. Take said money out of bank (probably only drawing about 0.5% or less in interest. Invest this $30,000 in a 5 year CD, right now because of the bad economy only about 2% interest, grandparents used to have CD's that were around 6% or more. CD is the safe way, i honestly would buy a rental house, real estate or some other form of investement with the $30,000. Take whatever credit card you have and pay your $500 truck payment with it online. If your card has cash back for purchases guess what, money in the bank. Key here is, PAY OFF STATEMENT AS SOON AS IT ARRIVES. Now the reason i brought up the safe and secure CD is because if you were to fall on hard times you can cash your CD in with no penalty. You just don't make as much interst on it, but guess what you were already making 5% or so cash back using someone else's money. Don't have to be rich to play the system, just smart enough to know your limitations and don't get carried away. My grandparents use this method for EVERYTHING. She said they average around $5,000 a month or so on the card. Always paid in full each month. Around $60,000 per year with 5% cash back, comes out to about $250 a month. About $670 a month when they were paying the motorhome also. This works for paying your gas bills, utilities, tires, medical expenses, insurance premiums etc.....it can really add up if you own a business. Large company with $30,000 a month in expenses. 5% cash back equals $1,500 a month to the bottom line. If your already operating at razor thin profits as some of you say, why would you leave this money on the table just to brag "I pay cash for everything"?

PerfectEarth
03-06-2013, 07:30 PM
I've had to go back 7 pages to find the word "TAX" or "TAXES" in this thread. This is not as simple as "I want it or need it, so I buy it/finance a low rate!" VS. "NO! Cash is king!"

When you run a growing, legit business on the books, you do NOT want to pay Uncle Sam if you can avoid it. So what we have done is purchase equipment, and most recently a new truck, on good credit. We pay the loan, manage cash, and banks love it. In turn, we can grow, purchase equipment that will help us be profitable, and have tools we NEED to work and grow.

I've diverted ton of money by financing and acquiring a working asset and NOT paying more to the GOV. Would I rather be debt free? HELL YES, but then I would be stuck paying more taxes, struggling with equipment needs, and not growing the business. Debt will come to an end one day (or be much less stressful) but not now. That's part of business and going in a forward direction. That's what financing is there for. A necessary evil that you make work for you.

newguy123
03-06-2013, 08:01 PM
[QUOTE=newguy123;4697848]Although your Grandma's story is pretty awesome...most businesses do not allow someone to pay debt with another form of debt (i.e., pay motor home debt with credit card.)

Sure they do. Buy new truck at 0% interest. Let's say $30,000, 60 equal payments at $500 each. Let's say you had the $30,000 already in the bank. Take said money out of bank (probably only drawing about 0.5% or less in interest. Invest this $30,000 in a 5 year CD, right now because of the bad economy only about 2% interest, grandparents used to have CD's that were around 6% or more. CD is the safe way, i honestly would buy a rental house, real estate or some other form of investement with the $30,000. Take whatever credit card you have and pay your $500 truck payment with it online. If your card has cash back for purchases guess what, money in the bank. Key here is, PAY OFF STATEMENT AS SOON AS IT ARRIVES. Now the reason i brought up the safe and secure CD is because if you were to fall on hard times you can cash your CD in with no penalty. You just don't make as much interst on it, but guess what you were already making 5% or so cash back using someone else's money. Don't have to be rich to play the system, just smart enough to know your limitations and don't get carried away. My grandparents use this method for EVERYTHING. She said they average around $5,000 a month or so on the card. Always paid in full each month. Around $60,000 per year with 5% cash back, comes out to about $250 a month. About $670 a month when they were paying the motorhome also. This works for paying your gas bills, utilities, tires, medical expenses, insurance premiums etc.....it can really add up if you own a business. Large company with $30,000 a month in expenses. 5% cash back equals $1,500 a month to the bottom line. If your already operating at razor thin profits as some of you say, why would you leave this money on the table just to brag "I pay cash for everything"?


I agree with you on the rental, that would be the best bet.

A CD at 2%, inflation is higher than that so you're actually losing money by parking in for only 2%.

Again, paying debt with debit in the form of a credit card, I'm not sure but I don't think a lot of businesses/etc. allow you to do that with high dollar purchases like a car/home.

I think it's a good strategy but a bank will not usually allow someone to pay debt with debt.

205mx
03-06-2013, 08:18 PM
What an alarming thread.

Don't forget the interest rate of risk.
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Jaybrown
03-09-2013, 12:30 AM
Finance an excavator if a tornado hits

muddywater
03-09-2013, 07:12 PM
I have been debt free for the last 10 years. Why the pluck would I finance anything with money in the bank? It just doesn't make sense. If you have money in the bank/investments, you just don't finance. I am not going to be anybody b!tch while they are syphoning money away from me. And there just aren't many safe investments out there that are going to pay that much more than the interest rate.

I have found when I make a 30k truck purchase or a 20k equipment purchase, it makes me evaluate my ROI with a fine tooth comb. When you are financing, you are just looking at covering the monthly expeditures not the ROI after 5 years. If I spend 30k in cash, I want a return in months not years. I am not in this business to have cool equipment or trucks, I am in this business to put cash in my bank account.

How many people finance a 50k truck have 300k in their account? Sh!t they probably don't have 50k in their bank account, that is why they financed the truck.

AllBrad
03-09-2013, 07:41 PM
subscribe.......

JimMarshall
03-09-2013, 07:49 PM
How many people finance a 50k truck have 300k in their account? Sh!t they probably don't have 50k in their bank account, that is why they financed the truck.

I think you assume too much.

weeze
03-09-2013, 09:28 PM
i financed my mower but it was 0% interest for 3 years. i paid half down in cash and i'm one payment away from paying it off. bascially i've bought it in cash just over a longer period of time rather than all at once. :laugh:

muddywater
03-09-2013, 11:54 PM
I think you assume too much.

No i have just bought out too many cash broke lco 's in the last 10 years. 90% of lco's dont have shat in their bank accounts. Its a fact, if your in the 10% congrats. After coming good friends with the biggest landscape nursery owner in town, i couldnt believe how many companies are sent to collections, have material liens on their jobs, and bounce checks.... but they all seem to drive 50k trucks.

cpllawncare
03-10-2013, 01:29 AM
Debt is not a bad thing as long as it's managed properly, debt free is not a realistic approach to a company looking to grow at any kind of pace. Had I tried to be debt free I would be out of business by now. I use my CC's all the time but they get paid off or damn near paid off every month. I look at people that try to stay debt free as generally being ignorant about how to properly manage the financial aspect of a company. No company got large by staying debt free.

lawnkingforever
03-10-2013, 03:27 AM
I have been debt free for the last 10 years. Why the pluck would I finance anything with money in the bank? It just doesn't make sense. If you have money in the bank/investments, you just don't finance. I am not going to be anybody b!tch while they are syphoning money away from me. And there just aren't many safe investments out there that are going to pay that much more than the interest rate.

I have found when I make a 30k truck purchase or a 20k equipment purchase, it makes me evaluate my ROI with a fine tooth comb. When you are financing, you are just looking at covering the monthly expeditures not the ROI after 5 years. If I spend 30k in cash, I want a return in months not years. I am not in this business to have cool equipment or trucks, I am in this business to put cash in my bank account.

How many people finance a 50k truck have 300k in their account? Sh!t they probably don't have 50k in their bank account, that is why they financed the truck.

Well said.
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lawnkingforever
03-10-2013, 03:39 AM
Debt is not a bad thing as long as it's managed properly, debt free is not a realistic approach to a company looking to grow at any kind of pace. Had I tried to be debt free I would be out of business by now. I use my CC's all the time but they get paid off or damn near paid off every month. I look at people that try to stay debt free as generally being ignorant about how to properly manage the financial aspect of a company. No company got large by staying debt free.

Have to agree to disagree on this one. I choose to stay a smaller operation by choice. But if I wanted to outfit a couple trailers with equipment and grow I could do it tomorrow without financing a dime. I have lived below my means for a long period of time and have made the right investments to have the capital to do so. I choose to be debt free, but there is nothing wrong with debt if that is what you choose to do. To say you cant grow without having debt is a pretty broad statement. Maybe you cant, but there are plenty of people that can outside your world.
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clydebusa
03-10-2013, 07:34 AM
To each his own. Made up my mind in 2009 to be debt free. Got rid of the trucks I was making payments on and bought only trucks and equipment I can pay cash for. Since then the bottom line is really good and in this bad economy times that is a plus. Basically I just have the insurance to deal with. So if the equipment sets for a month no big deal. When you have debt you can't say that. I do agree that if you have the money and decide to do the zero % for xx months then that is okay. But the loan company is banking on you will be late and have to pay the complete loan with interest. But please if the ones that want the new equipment buy them, if everyone had my and other ideas we wouldn't have equipment to buy!:drinkup:

32vld
03-10-2013, 08:39 AM
Debt is not a bad thing as long as it's managed properly, debt free is not a realistic approach to a company looking to grow at any kind of pace. Had I tried to be debt free I would be out of business by now. I use my CC's all the time but they get paid off or damn near paid off every month. I look at people that try to stay debt free as generally being ignorant about how to properly manage the financial aspect of a company. No company got large by staying debt free.

What you do works because you have the cash flow to pay the CC off in 30 days. Because the way you use credit works does not mena the use of credit is always the right way to go.

Most do not have the cash flow. Cash flow problems are why most new businesses go down.

And you are wrong there have been companies that have grown large without using credit.

Not anti credit. Against using credit poorly.

JimMarshall
03-10-2013, 11:49 AM
No i have just bought out too many cash broke lco 's in the last 10 years. 90% of lco's dont have shat in their bank accounts. Its a fact, if your in the 10% congrats. After coming good friends with the biggest landscape nursery owner in town, i couldnt believe how many companies are sent to collections, have material liens on their jobs, and bounce checks.... but they all seem to drive 50k trucks.

Of course, my operation is probably a bit bigger than most here, but if they are offering 0%, I see no reason not to finance. That money makes me a lot more in interest sitting in my bank account than it does sitting in the dealers.

muddywater
03-10-2013, 12:21 PM
Your interest is already built into the purchase price, so you arent saving anything. And money markets only pay 1%, so the advantage is negligible.

I am a smaller operation(alittle over 1 mil in sales), but i grew with no debt and if i needed to start 3 more crews i could do it without a loan.
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weeze
03-10-2013, 06:33 PM
I am a smaller operation(alittle over 1 mil in sales), but i grew with no debt and if i needed to start 3 more crews i could do it without a loan.
Posted via Mobile Device

that's not a small company by any means. :laugh:

i make 50k a year gross or less.

zackvbra
03-10-2013, 08:27 PM
Your interest is already built into the purchase price, so you arent saving anything. And money markets only pay 1%, so the advantage is negligible.

I am a smaller operation(alittle over 1 mil in sales), but i grew with no debt and if i needed to start 3 more crews i could do it without a loan.
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What I ask you sir is what would you call a big operation??:laugh:

cpllawncare
03-10-2013, 08:58 PM
Have to agree to disagree on this one. I choose to stay a smaller operation by choice. But if I wanted to outfit a couple trailers with equipment and grow I could do it tomorrow without financing a dime. I have lived below my means for a long period of time and have made the right investments to have the capital to do so. I choose to be debt free, but there is nothing wrong with debt if that is what you choose to do. To say you cant grow without having debt is a pretty broad statement. Maybe you cant, but there are plenty of people that can outside your world.
Posted via Mobile Device

I agree! I made a broad statement, I'm not ignorant to the fact that there are people out there with a ton of cash sitting in the bank, but the avg American has less than 30K in the bank, there are always exceptions. if your sitting on a ton of cash your an exception to the rule. I agree! cash is king, but then you have to recover that cash, how long does that take? and then if something does go wrong your just out a bunch of cash. If I have to give back a financed mower I'm only out the payments I made, I've never had this happen and don't expect it to, but I'm just sayin. I could pay off everything I have financed right now, I've got my purchases spread out so that every year something gets paid off, as well as adding business the bottom line looks better and better every year, I kinda think that's how it's supposed to be.

precisionlawnandlandscape
03-10-2013, 11:10 PM
[QUOTE=muddywater;4701027]And money markets only pay 1%, so the advantage is negligible.

Just refinaced $100,000 mortgage at 2.9%, current investments are averaging 20%+, investment profits are growing tax free each year and what small amount of mortgage interest i pay each year is tax deducible. Think i will keep traveling the current road im on for now, Why would i take $100,000 out of my investment money making 20%+ to save 2.9%? Now granted, you have to be smart here and not get carried away with debt. If it was an 8 or 9% mortgage like was common 10 years ago, now that would be a whole different story.

cpllawncare
03-10-2013, 11:19 PM
[QUOTE=muddywater;4701027]And money markets only pay 1%, so the advantage is negligible.

Just refinaced $100,000 mortgage at 2.9%, current investments are averaging 20%+, investment profits are growing tax free each year and what small amount of mortgage interest i pay each year is tax deducible. Think i will keep traveling the current road im on for now, Why would i take $100,000 out of my investment money making 20%+ to save 2.9%? Now granted, you have to be smart here and not get carried away with debt. If it was an 8 or 9% mortgage like was common 10 years ago, now that would be a whole different story.

I don't have a mortgage, my investments are growing tax free as well, but I'm talking strictly from a business perspective not a personal perspective I keep the two completely separate.

205mx
03-10-2013, 11:21 PM
[QUOTE=muddywater;4701027]And money markets only pay 1%, so the advantage is negligible.

Just refinaced $100,000 mortgage at 2.9%, current investments are averaging 20%+, investment profits are growing tax free each year and what small amount of mortgage interest i pay each year is tax deducible. Think i will keep traveling the current road im on for now, Why would i take $100,000 out of my investment money making 20%+ to save 2.9%? Now granted, you have to be smart here and not get carried away with debt. If it was an 8 or 9% mortgage like was common 10 years ago, now that would be a whole different story.

Who the heck said to cash out retirement investments
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precisionlawnandlandscape
03-11-2013, 01:03 PM
[QUOTE=precisionlawnandlandscape;4701676]

I don't have a mortgage, my investments are growing tax free as well, but I'm talking strictly from a business perspective not a personal perspective I keep the two completely separate.


I also keep my business and personal stuff totally seperate, only way to go in my opinion. I treat myself as an employee of my businees. I was just pointing out that as i said before NOT ALL debt is totally the worst thing ever. This statement holds true when talking about growth and investments only. In a nutshell, it only makes sense when the reward outweighs the cost. If you can't sleep at night stictly because you have a loan of some sort, even if it is at 0% interest, then chances are you can't handle the stress of business ownership anyway. I personally don't have any business debt, but this is a lot easier business to grow with no debt than most others out there.
One of my friends family owns a large machine shop. They got asked to bid on a goverment contract about 8 years ago. They didn't have the correct machine to do the job, however they found what they would need, got a turnkey price for the machine and quoted the contract accordingly. They got a 3 year contract for the job. Even if they lost the job after the 3 years, they would have the machine payed off. Cost of machine was $12,000 per month even after paying about $350,000 down in cash. Now was this a bad business decision to finance this equipment to pick up this job? I don't think so, especially since after that, this defense contractor has become one of their biggest customers, with about 2.5-3 million in contracts per year. It would have been stupid to go by the machine with the HOPE of getting the job. But after getting it in writing, it makes more sense. If they would have had the mindset of some on here, they would have said "hell no, i don't want that payment, that's ignorant". It's just part of playing the game sometimes.
On a side note, out of curiousity i asked him last week if the government cuts were going to hurt him and he said actually it may help them. Some of the higher priced stuff that they don't do is getting cut in favor of the parts that they do.

32vld
03-11-2013, 02:48 PM
[QUOTE=muddywater;4701027]And money markets only pay 1%, so the advantage is negligible.

Just refinaced $100,000 mortgage at 2.9%, current investments are averaging 20%+, investment profits are growing tax free each year and what small amount of mortgage interest i pay each year is tax deducible. Think i will keep traveling the current road im on for now, Why would i take $100,000 out of my investment money making 20%+ to save 2.9%? Now granted, you have to be smart here and not get carried away with debt. If it was an 8 or 9% mortgage like was common 10 years ago, now that would be a whole different story.

Getting better interest ROI then Bernie Madoff.

precisionlawnandlandscape
03-11-2013, 05:40 PM
[QUOTE=precisionlawnandlandscape;4701676]

Getting better interest ROI then Bernie Madoff.


Oh, poor Bernie. He's getting the only ROI he deserves right now. As far as myself I can't complain right now, that's for sure. Now granted that's not been my normal ROI for the last 10 years or so. My average for the last 5 years has been a little over 12%, but that's including the huge losses in 07-09. I missed about 90% of that. When it got up about 12,000-13,000 points i took alot and moved it to lower risk stuff, rode out the downward spiral and then moved it back at the start of the uptick. There was some luck involved there also, i just didn't think the huge gains would continue forever (just like the ones now aren't either). I've already done some moving around since last Friday after the Dow hit record highs 4 days in a row, can you say "BUBBLE"

Speaking of the debt discussions and posts from earlier. Found some interesting information on the internet. I'm sure we would all agree (whether we shop there or not), that Wal-mart is a major global powerhouse and economic giant. As of 1/31/13, they had gross sales in 2012 of 443.9 Billion dollars (that's with a "B") and long term debt (debt of more than a years length) of 53.81 Billion. Yes that's right, even Wal-mart apparently can't grow debt free, or perhaps it could be that they see the advantages to certain amounts of debt and it's ability to fuel it's global domination.

newguy123
03-11-2013, 06:09 PM
[QUOTE=32vld;4702197]


Oh, poor Bernie. He's getting the only ROI he deserves right now. As far as myself I can't complain right now, that's for sure. Now granted that's not been my normal ROI for the last 10 years or so. My average for the last 5 years has been a little over 12%, but that's including the huge losses in 07-09. I missed about 90% of that. When it got up about 12,000-13,000 points i took alot and moved it to lower risk stuff, rode out the downward spiral and then moved it back at the start of the uptick. There was some luck involved there also, i just didn't think the huge gains would continue forever (just like the ones now aren't either). I've already done some moving around since last Friday after the Dow hit record highs 4 days in a row, can you say "BUBBLE"

Speaking of the debt discussions and posts from earlier. Found some interesting information on the internet. I'm sure we would all agree (whether we shop there or not), that Wal-mart is a major global powerhouse and economic giant. As of 1/31/13, they had gross sales in 2012 of 443.9 Billion dollars (that's with a "B") and long term debt (debt of more than a years length) of 53.81 Billion. Yes that's right, even Wal-mart apparently can't grow debt free, or perhaps it could be that they see the advantages to certain amounts of debt and it's ability to fuel it's global domination.

I agree with you that debt can be used as a tool but I don't think it's necessary for our business.

On the other hand, Walgreens is a debt free business...it uses their excess cash to fund their new locations and developments.

So the "you have to use debt to grow" philosophy isn't necessarily accurate 100% of the time.

Patriot Services
03-11-2013, 06:57 PM
I worry about the guys that manage to make a bit of money from this and have no idea what to do from there. 2% is sure safe but you could do so much more with your hard earned money. This business is a means to an end. Figuring out what to do with it isn't hard but you do need to educate yourself. Do not put it in the hands of an advisor or broker and turn your back. They get paid whether you make money or not and the last thing they want you to do is take money out. The unquestionable trust people put in these unscrupulous money handlers cost millions of people their nest eggs. You don't need to be a stockbroker to make good investments, but putting it in your mattress or a hole in the wall is just a damn shame.
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muddywater
03-11-2013, 10:23 PM
I worry about the guys that manage to make a bit of money from this and have no idea what to do from there. 2% is sure safe but you could do so much more with your hard earned money. This business is a means to an end. Figuring out what to do with it isn't hard but you do need to educate yourself. Do not put it in the hands of an advisor or broker and turn your back. They get paid whether you make money or not and the last thing they want you to do is take money out. The unquestionable trust people put in these unscrupulous money handlers cost millions of people their nest eggs. You don't need to be a stockbroker to make good investments, but putting it in your mattress or a hole in the wall is just a damn shame.
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I kind of agree with you. I think you need to be an expert at making or getting a return on your money. How many of us are experts in investing???

I know you are probably somewhat of an expert in real estate, and you have a niche. I just think to make a 10% return you need to be an expert. There just isnt much out there that makes a great return without expert knowledge. And i will be the first to admit i an not an expert on stocks, and like you said most stock brokers are not much different than car salesman.

I look at starting another crew as an investment with a 20% return. Why would i leverage this investment? It is the investment....and one i have control over. And an investment i am an expert on.
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precisionlawnandlandscape
03-12-2013, 12:45 PM
[QUOTE=precisionlawnandlandscape;4702353]

I agree with you that debt can be used as a tool but I don't think it's necessary for our business.

On the other hand, Walgreens is a debt free business...it uses their excess cash to fund their new locations and developments.

So the "you have to use debt to grow" philosophy isn't necessarily accurate 100% of the time.


I never once said that you "HAVE" to have debt to grow, merely stated that starting from scratch (this means without the help of your parents or anyone else), it would be hard to grow at an exceptionally fast rate without using credit to your advantage and that cash isn't always king in every situation.

And according to the link below, Walgreens is "FAR" from being debt free.
Even had their credit rating dropped, because of increasing their debt to about 6 billion, to acquire interest in another company.

http://www.moodys.com/research/Moodys-downgrades-Walgreens-sr-unsecured-rating-to-Baa1-outlook-negative--PR_252144

cpllawncare
03-12-2013, 02:33 PM
I have to agree with Precision on this, to grow at any kind of pace, you really need to be willing to have some debt, it just has to be managed you can't go hog wild. You can grow without it but at a MUCH MUCH slower pace.

muddywater
03-12-2013, 02:39 PM
Well cash is always king if you got enough of it! I agree its hard to start up without a loan, but it can be a rough ride. I just dont like debt personally because i would rather own my assets than the bank.

And i think when you are buying equipment and trucks with cash it is easier get great deals. The last guy that bought one of my trucks took 3 days to get financing. Most of the equipment deals i find are gone in less than 24 hours.
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newguy123
03-12-2013, 09:33 PM
[QUOTE=newguy123;4702383]


I never once said that you "HAVE" to have debt to grow, merely stated that starting from scratch (this means without the help of your parents or anyone else), it would be hard to grow at an exceptionally fast rate without using credit to your advantage and that cash isn't always king in every situation.

And according to the link below, Walgreens is "FAR" from being debt free.
Even had their credit rating dropped, because of increasing their debt to about 6 billion, to acquire interest in another company.

http://www.moodys.com/research/Moodys-downgrades-Walgreens-sr-unsecured-rating-to-Baa1-outlook-negative--PR_252144

My fault I was thinking of a different company...I think it was RiteAid or something.

Anyways Bed Bath & Beyond is a debt free company...it doesn't really matter.

My point wasn't to dismiss your logic, but to prove there are still large businesses that operate on a debt free strategy.

muddywater
03-12-2013, 09:37 PM
[QUOTE=precisionlawnandlandscape;4703278]

My fault I was thinking of a different company...I think it was RiteAid or something.

Anyways Bed Bath & Beyond is a debt free company...it doesn't really matter.

My point wasn't to dismiss your logic, but to prove there are still large businesses that operate on a debt free strategy.

It happens no doubt, a company spent 250 mil cash on a factory we were bidding landscaping on last year.
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precisionlawnandlandscape
03-13-2013, 12:30 PM
[QUOTE=newguy123;4704021]

It happens no doubt, a company spent 250 mil cash on a factory we were bidding landscaping on last year.
Posted via Mobile Device

You are correct, it does happen occasionally. One thing that people don't realize is a lot of the times (and not saying it was in the case you described)what happens is companies either raise a lot of cash through investors, or they themselves are an investment company (using other peoples money). They are still using other peoples money, in exchange for a cut of the profits. It still essentially works the same, either borrow from bank and pay interest or borrow from investors and pay with % of company profits. In these cases it still costs you in the long run to get the money. This method has been becoming real popular in the Nascar racing world lately. When sponsorship dollars started drying up, teams went out and started bringing in investors instead of using there cash or savings up. I have seen 1st hand some downfalls to this method in the long run. When you borrow from the bank, for the most part they don't tell you how to run your business, as long as you make your payments on time. When you have investors, and they get their board of directors involved in your day to day operations, to keep their shareholders happy, your world becomes a nightmare. You might as well not be working for yourself anymore at that point.

Blades Lawn Maintenance
03-21-2013, 05:38 PM
Subscribing

recycledsole
03-24-2013, 09:14 PM
boil down your needs. keep track of all personal and business expenses. live within your means

205mx
03-24-2013, 09:37 PM
boil down your needs. keep track of all personal and business expenses. live within your means

Wife gave birth to my boy over the off season.
I wasn't earning. And neither was she.

We have savings, but we tought ourselves how to budget.

It's been great. Can't wait till my season really starts.
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ringahding
03-24-2013, 10:09 PM
We are not DEBT FREE....we have taken on a certain amount of debt to build the businesses credit. This has actually made a huge difference in the growing process.
I can say my very first ever brand new anything Ford F350 is paid for. My brand new Toro G3/20' Enclosed Trailer and Chevy 3500 4-door will all be paid for before the end of this season.
Obviously there is a lot to be said for OWNING, I mean actually owning something.
I highly suggest those new to the biz, not to by everything BRAND NEW. If you can actually keep the business running past the five year mark, that will be the time to really consider it. Depending on how many accounts you have, budget, etc..

cpllawncare
03-25-2013, 09:07 PM
Ring,

We're in our fifth year and we're not debt free either, but I've set everything up to pay off a piece of equipt every year, I bought a new GS our third year which will be paid off this year and a another one this year which will be paid off next year or the year after depending on how business goes. It's really about properly managing your debt and cash flow and not going over board, fortunately our business has grown quite a bit, like you I took on some debt in order to grow the business, I've used it mostly for marketing purposes and it has paid off, when your taking hundreds and turning it into thousands each month it makes sense to use credit to do it.

ed2hess
03-25-2013, 09:37 PM
you can borrow money at the lowest rates ever and people are talking about not taking advantage:dizzy::dizzy:

meets1
03-25-2013, 09:41 PM
I agree, you need debt but within reason. Everyone has a different take, different circumstances to which they evoled. I too will have all paid for this year. Over the last 5 years we have new 7 new trucks. Last one is paid in full in september 2013. All equipment is finally paid for which includes 5 new exmarks from a 1-2 years back, 2 new bobcats, etc. Accounting meeting this month, tax man said get things paid for this year but to offset any future taxed, time to think to add to fleet or change out some equipment. You gotta be planning for tomorrow because today already happened, your too late.

mrshelby
03-25-2013, 09:50 PM
I've been in business for the last 7 years debt free.I started out with mostly new equipment including a new 61 scag wildcat.My truck was used but in good shape.I invested about 20k for everything and am still using all of the same equipment including my truck.The key is to take very good care of your gear and buy the best that you can.Also be professional and do your work in the same manner.