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SVA_Concrete
09-09-2012, 05:07 PM
Why on earth do you folks spend so much on equipment.

spinning off another thread:


And I think its probably easier to say having more like 150-200k on a hardscaping job in equipment

Truck-50k
Trailer-7k
Skid Steer-60k
Saws-1k
Dump Truck and Trailer to move equipment/material 75-100k

In my humble opinion you paid too much for your truck and skidsteer, and trailer.

Why guys like me sell jobs for less, with good profit:

Truck 17k
trailer 2k -equipment
trailer 4k (16 foot dump, hauls ex)
5 ton ex 24k
CTL 29k
dump truck -per load as needed 75-90 a load
matls deliv - supplier provided save labor vs fetching matls

Ive got more equip, for less money. and its not out of date,
2005 truck (cummins 5.9)
2007 CTL (600 hrs)
2005 5 ton ex (2500 hrs)
2005 ish trailers.

79K vs your 200k, my overhead is probally 1500 a month lower than yours, and I have an excavator in this list.

now I don't have cabbed units, power windows, etc. But I can still get to the job, look professional and move the earth just as well.

Ticolawnllc
09-09-2012, 05:33 PM
I think lots of guys like some of my family brag how much they pay as a way of bragging.

Stuttering Stan
09-09-2012, 06:33 PM
When people are new to the business, they want all the big, cool toys.
With this newbie mentality, overhead and profit are relative unknowns. After a few years, , the newness wears off and reality sets in. Gently used equipment is sold for next to nothing.

DVS Hardscaper
09-09-2012, 07:48 PM
We still run our first skid steer, a 1997. She purrs better than any new skid steer out there.

Our dump truck is a 2001 that I bought new. Been Paid for for eons.

I just bought a 14,000 GVW trailer. 4 years old, owned by an old man, the decking doesn't have a scratch on it. paid $3000.00 cash.

My company truck - is. 2004 with 252,000 miles! I have no intentions of replacing it.

I'm as low overhead as one can be. If you're a local contractor in my area and your prices are lower than mine - then you won't be around much longer.
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Birchwood
09-09-2012, 10:11 PM
My mowing crews setup ran less then 15k
truck 5500
trailer 3500
3 mowers 2500
misc all new handhelds 1500





Install crew setup ran around 10k
my dump was $2800 and runs great!



Bank owns nothing, been there done that.

muddywater
09-09-2012, 10:54 PM
And that 200k worth of equipment is worth about 80k in a couple years. Talk bout taking it in the pants.

zedosix
09-10-2012, 09:27 PM
I'd buy a 97' f350 in a heartbeat but I just can't seem to find one with nav and bluetooth so I'll stick with the truck I have. But I'm all for recycling, its nice to see that someone buys the used crap I get rid of. :)

Krafty
09-10-2012, 10:16 PM
I'd buy a 97' f350 in a heartbeat but I just can't seem to find one with nav and bluetooth so I'll stick with the truck I have. But I'm all for recycling, its nice to see that someone buys the used crap I get rid of. :)

Zedo I can't wait till 2025 when I can own a 2012 like yours!!:drinkup::drinkup:

sven1277
09-12-2012, 10:55 PM
I'm not sure used stuff is always a better value. I have purchased my '00 pickup twice now since I bought it new in repairs I've done to it in the last 3 yrs. Transmission, new engine, another transmission, frame work, starter, brakes, water pump, thermostat, raidator, plugs, wires, exhaust work, tires. I should have traded it in back in '09 when it started getting expensive. Oh well, you win some, you lose some.

DVS Hardscaper
09-13-2012, 06:17 AM
I'm not sure used stuff is always a better value. I have purchased my '00 pickup twice now since I bought it new in repairs I've done to it in the last 3 yrs. Transmission, new engine, another transmission, frame work, starter, brakes, water pump, thermostat, raidator, plugs, wires, exhaust work, tires. I should have traded it in back in '09 when it started getting expensive. Oh well, you win some, you lose some.

A) u probably didnt know what you were buying

B) perhaps the truck is undersized for what you're using it for


.
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all ferris
09-13-2012, 07:13 PM
I'm the one who brought up having over $100k in equipment at a job site. I guess what I was trying to say is that if you went out and bought all the equipment new or slightly used that I bring to a job site it would be over $100k.

My F450 dump was $52000 that I bought new in 2008

T200 Bobcat was $25000 bought used in 2005

MT55 Bobcat was $18500 new in 2009

Equipment trailer was $4500 bought new in 2003.

Little stuff like saws and laser was like $4000 bought new at various times.

Heck, I think I have over $500 just in shovels, rakes, hammers etc.

Just my knowledge alone is worth quite a bit:laugh:

The list goes on but if I bought all that stuff plus all the little stuff at one time you can see where the $100k comes from.

DVS Hardscaper
09-13-2012, 08:19 PM
Yes, there is alotta money tied up in building patios. And that's why a majority of the guys that try hardscapes only make it less than 6 years.

It's hard to make money when you're working for the banks.

One of my Pet Peeves is when other contractors in the area price work for so much less......yet they're riding around in new trucks and tugging new skid steers up and down the road.
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muddywater
09-13-2012, 10:05 PM
Yes, there is alotta money tied up in building patios. And that's why a majority of the guys that try hardscapes only make it less than 6 years.

It's hard to make money when you're working for the banks.

One of my Pet Peeves is when other contractors in the area price work for so much less......yet they're riding around in new trucks and tugging new skid steers up and down the road.
Posted via Mobile Device

I just cant believe how long those contractors can stay in business. And when they go under, another contractor/finance king fills there spot almost instantly. Its a never ending cycle.

I guess the average time span is about the same as their 5-year note on their king ranch
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Krafty
09-13-2012, 10:28 PM
Yes, there is alotta money tied up in building patios. And that's why a majority of the guys that try hardscapes only make it less than 6 years.

It's hard to make money when you're working for the banks.

One of my Pet Peeves is when other contractors in the area price work for so much less......yet they're riding around in new trucks and tugging new skid steers up and down the road.
Posted via Mobile Device

Is it really fair to assess another business simply because you saw some of there equipment rolling down the road?? Not saying I disagree. I do believe there are lots of people out there that are "finance kings" but I also know that just because he can do it cheaper then me does not mean he is necessarily a low baller.

zedosix
09-13-2012, 10:29 PM
I find that the younger ones spend the most on the big trucks and equipment, I see it here all the time and they don't stay in business long. It just goes to prove how easy it is for someone to get a loan and mortgage themselves to the hilt. When I started business in '87 I bought myself a 78 half ton pick up with 3 speed on the column, it cost me 600 dollars and I had to borrow the money to get it running. I paid it back and spent a year in that thing. Today you don't see any of the new guys buying old trucks and fixing them up, they want the king ranches and ltz's on day one with a power-tilt float and track loaders, its a shame really, cause they wanna be like us older guys who own the king ranches but they're missing the point. Why be in business if all you're going to do is pay for equipment. Oh and the work they are doing is shamefull.

Krafty
09-13-2012, 10:35 PM
I'm the one who brought up having over $100k in equipment at a job site. I guess what I was trying to say is that if you went out and bought all the equipment new or slightly used that I bring to a job site it would be over $100k.

My F450 dump was $52000 that I bought new in 2008

T200 Bobcat was $25000 bought used in 2005

MT55 Bobcat was $18500 new in 2009

Equipment trailer was $4500 bought new in 2003.

Little stuff like saws and laser was like $4000 bought new at various times.

Heck, I think I have over $500 just in shovels, rakes, hammers etc.

Just my knowledge alone is worth quite a bit:laugh:

The list goes on but if I bought all that stuff plus all the little stuff at one time you can see where the $100k comes from.

I think what everyone is getting at is Do you really need a 52k f-450 to do the job, or will the used 15k truck to the same job at the same pace. We still have the first dump truck I bought, it is a 1995 3500 dump. Bought it for 1500 bucks and slapped a 2k bed on it. It is still in our fleet and goes out every day with well over 250k miles on it. Sure it needs repairs from time, but you take a 800 a month payment thats $9600 a year. Thats a heck of a lot of money.

DVS Hardscaper
09-14-2012, 08:11 AM
There are a few Lawnsite members here running million dollar (+) businesses and their equipment is all purchased used.

If you're making alotta payments on stuff.....all you're doing is working for the banks.
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scagrider22
09-14-2012, 07:31 PM
I partially agree with this thread, most of my bigger equipment was bought gently used so that somebody else took the big hit and I still ended up with clean late model trucks, skids, etc. And I am very patient when making a new purchase, I will search for months. I started looking for a used mini excavator in January and I had no luck finding one, people seem to run them into the ground. Every mini that I found in good condition was almost the cost of a new one and every mini I found in the $25,000 range had 2000-3000 hours on it and would most likely need undercarriage work. So in this case I think it made sense to buy a new machine. I wasn't sure about my decision until we got it out on a commercial retaining wall and wow did it save me a lot of time over my old mini. Another thing I typically by new is trailers, the used one seem to be about the same price as new. But I will probably never buy new dump trucks they are crazy expensive.

muddywater
09-23-2012, 08:44 PM
This kid spent 72k on a dodge 3500 from a dealership. I didn't even know that was possible. Then he works out of the thing. and it sounds like he makes his workers follow him around to jobsites because he doesn't want them dirtying up his truck. Unbelieveable.

http://www.lawnsite.com/showthread.php?t=368813

jbailey52
09-23-2012, 09:12 PM
This kid spent 72k on a dodge 3500 from a dealership. I didn't even know that was possible. Then he works out of the thing. and it sounds like he makes his workers follow him around to jobsites because he doesn't want them dirtying up his truck. Unbelieveable.

http://www.lawnsite.com/showthread.php?t=368813

You know, sometimes I get buyers remorse... But after reading that thread, my god! That is nothing but a "hey look what I bought" wow could you imagine spending 70000 on a work pickup truck. What my father would do to me......

Krafty
09-23-2012, 09:19 PM
This kid spent 72k on a dodge 3500 from a dealership. I didn't even know that was possible. Then he works out of the thing. and it sounds like he makes his workers follow him around to jobsites because he doesn't want them dirtying up his truck. Unbelieveable.

http://www.lawnsite.com/showthread.php?t=368813

WOW is all I have to say I am speechless..... That kid needs his head checked

zedosix
09-23-2012, 09:22 PM
Any descent new pickup with all the fixins runs at least 72k, my pickup listed 83k but I had a good deal on it. I also don't want my dirty employees in it either. Of course I could of spent 20k less but it wouldn't of been what I wanted.

xtreem3d
09-23-2012, 09:48 PM
Any descent new pickup with all the fixins runs at least 72k, my pickup listed 83k but I had a good deal on it. I also don't want my dirty employees in it either. Of course I could of spent 20k less but it wouldn't of been what I wanted.

Is that 72K Canadian? Any truck around here loaded wouldn't be 72K. I just looked at diesel duallies (Dodge) the other day and they were 58K loaded.
Steve

DVS Hardscaper
09-23-2012, 09:48 PM
Its one thing for a seasoned, veteran contractor that's been in business for over 10 years to spend money on big ticket items.

But another for someone thats been in business only 3-7 yrs to spend.

There is another internet forum, "The Premier Site", and all 3 of the partners that started and manage the site.....are no longer in business.

All these new guys are doing is working for the banks. I've been there and done that.

I could never spend more than 20k for a pick up. And no more than $50k for a med duty dump truck. My heart is in other things in my life - like projects at home, Carribean vacations, and my kid. I pay cash for all those things, I dont even own a credit card. If I bought big ticket items for the biz, we would not have what we have and the collectors would be ringing my phone from sun-up to sunset!

muddywater
09-23-2012, 09:51 PM
Any descent new pickup with all the fixins runs at least 72k, my pickup listed 83k but I had a good deal on it. I also don't want my dirty employees in it either. Of course I could of spent 20k less but it wouldn't of been what I wanted.

Well i just cant set that much cash on fire. My little 2010 tacoma i bought for 14k with 20k miles does me just fine. And it keeps me from doing any real work and focused on running the business. I actually prefer it over my last loaded 2500 duramax.

xtreem3d
09-23-2012, 10:02 PM
I guess if you have the money and want it that's great . You've probably heard this before , the number one item you should never buy new is a vehicle. .I shop for everything used, in good shape first before I buy new. If your patient you can find what your looking for. I have a shop filled with all kinds of tools but don't have alot invested. I own 5 skid steers and only have about 70K into them whereas I know guys buying skids for 50K plus each.
Steve

DVS Hardscaper
09-23-2012, 10:23 PM
Many so called "men" are simply ignorant when it comes to trucks and machinery. They don't know what to look for when lookin at used. They don't know how to work on the stuff. So they buy new. But they probably surely know how to select curtains for their house.
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zedosix
09-23-2012, 10:33 PM
Is that 72K Canadian? Any truck around here loaded wouldn't be 72K. I just looked at diesel duallies (Dodge) the other day and they were 58K loaded.
Steve

Our trucks and cars are overpriced compared to the states, considering our dollar has been on par and over par for quite some time it really doesn't make sense. Up here you would be lucky to find any diesel for under 60k unless it had very few options.

xtreem3d
09-23-2012, 10:36 PM
wasn't being critical ..just figured you might have meant Canadian..YIKES !!!!

cecilmac
09-27-2012, 11:13 PM
Me personally i bought 1st truck brand spankin new n honestly wld i ever do it again hell no. It sucked makimg that payment everymonthugghhh. 2nd n third were bought used bought fords w the 7.3 diesels n they run better then the new trucks. Dingos were bought used, trailers new cause tbey were almost the same price. I used to b skeptical on buying used but if u kno what to look for than u can find some great deals. It all depends on what ur doing w the equipment as well also it seems that tbe new trucks are built lk peices of ****..
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swampdonk
09-27-2012, 11:31 PM
I totally agree with DVS. I see many first timers with nicer trucks than I have. But in about 4 yrs. those trucks are no where to be found. I have never purchased a new piece of equipment (outside of small items) since being in business. Not by choice, I just didn't have the money or anyone that would co-sign for me. I am thankful that my parents didn't help me out when I first started. I learned how to save and make practical decision's when purchasing.

swampdonk
09-27-2012, 11:35 PM
Start looking around for a piece of equipment before you need to buy. More than likely you will stumble on a good deal. The worst time to buy a piece is when you need it. You will most certainly make a hasty decision and pay to much.

GreenI.A.
09-28-2012, 05:55 PM
I don't know why any body would complain about new guys getting into the business and getting all new equipment. When these guys go under and the repo men come, the equipment has probably seen little hours and the trucks probably have little use damage. That's when others get to step in and buy the slightly used cheap.

This spring I picked up a couple almost brand new plows on craigs list. They were all from guys who bought last fall/winter for extra income and when we didn't get any snow they couldn't afford the payments and needed to unload them quick. I picked them up cheap, turned around and sold them for what they were worth. Made some nice easy cash. I've done the same with a couple enclosed trailers as well.


As far as justification for spending money for trucks with all the bells and whistles. I spend a lot of time in my truck, it's not only my transportation but for the most part it's my office as well. It's were I do 95% of my phone calls, billing, scheduling, designing, I like to be comfortable in it. It's a 07' f250 crew cab lariat, I bought it in 10' when it had less than 40k miles on it. A few guys I know thought I was crazy getting a 3yr old lariet, tried to tell me to go with an older XLT. But the amount of time and miles I do, I couldn't disagree more. I have been looking to trade it now for an 2011-2012 slightly used crew cab f350 lariat. If business was a little better this year I would be driving a brand f350 or 450 lariat.

lukemelo216
09-29-2012, 11:56 AM
Why on earth do you folks spend so much on equipment.

spinning off another thread:



In my humble opinion you paid too much for your truck and skidsteer, and trailer.

Why guys like me sell jobs for less, with good profit:

Truck 17k
trailer 2k -equipment
trailer 4k (16 foot dump, hauls ex)
5 ton ex 24k
CTL 29k
dump truck -per load as needed 75-90 a load
matls deliv - supplier provided save labor vs fetching matls

Ive got more equip, for less money. and its not out of date,
2005 truck (cummins 5.9)
2007 CTL (600 hrs)
2005 5 ton ex (2500 hrs)
2005 ish trailers.

79K vs your 200k, my overhead is probally 1500 a month lower than yours, and I have an excavator in this list.

now I don't have cabbed units, power windows, etc. But I can still get to the job, look professional and move the earth just as well.



I should have probably explained better and I misquotted a little too.

We are not a brand new company. We have been in business for over 20 years and are a multimillion dollar per year company. The equipment I listed above is our average crew, we run 6.

We have 2 commercial construction, 1 residential construction, 2 maintenace, 1 commercial construction service/maintenance crew, and two full time truck drivers.

Our three construction crews run with f550s with enclosed tools trailers, our commercial maintenance has an f350 dump with 28' enclosed, and our other maintenance crew runs with a f250 and 14' enclosed. Then our commercial service crew used an f250 with small enclosed trailer. We also have our hydroseeding rig, plus a few misselaneous f250s and about 35 guys to run with

Then our two truck drivers have a Peterbuilt and a Freightliner. They move all of our soft (have our own 100 acre nursery) and hard goods, plus our 4 skids, dozer, and backhoe.

All of our trucks run from 1998-2005's and are bare bones. All of them are paid off and have an average of about 115k on them, so there is still plenty of life on them. Both the backhoe and the dozer are around 25 years old and have about 2500 hours on them each and our skids are anywhere from 1-5 years old.


I agree it is stupid to be brand new and have all of the newest flashiest equipment out there, but after you have been in business for 15+ years you have a good idea of whats going on. We always weigh the options of new vs used, and 95% of the time we go new (pay it off in 3 years) and then have a solid piece of equipment on the road for another 10 years.

muddywater
09-29-2012, 09:38 PM
I stll dont understand why you would finance. Doing several million a year, and if profitable why not just write a check?

GreenI.A.
09-29-2012, 11:24 PM
I stll dont understand why you would finance. Doing several million a year, and if profitable why not just write a check?

For some companies there are very good reasons to finance rather than pay cash. Even a company doing a couple million dollars a year does not necessarily have the capitol sitting in their account to just drop 40k on the truck they need, it is much easier on there wallet to pay the extra annually for interest instead. If your shopping at the right time of year, when new models are coming out, the manufacturers are usually offering 0% on leftovers if you qualify. Yes paying cash, is cheaper than paying interest, but not always. When I have bought new trucks in the past, I always told the salesman I was paying cash when we negotiated a price. Only after a good price was agreed upon would I ask about financing. Then I would tell them I would finance the vehicle with them if they off set the interest percentage.

muddywater
09-29-2012, 11:35 PM
For some companies there are very good reasons to finance rather than pay cash. Even a company doing a couple million dollars a year does not necessarily have the capitol sitting in their account to just drop 40k on the truck they need, it is much easier on there wallet to pay the extra annually for interest instead. If your shopping at the right time of year, when new models are coming out, the manufacturers are usually offering 0% on leftovers if you qualify. Yes paying cash, is cheaper than paying interest, but not always. When I have bought new trucks in the past, I always told the salesman I was paying cash when we negotiated a price. Only after a good price was agreed upon would I ask about financing. Then I would tell them I would finance the vehicle with them if they off set the interest percentage.

If you do 2-3 million a year and cant write a 40k check out of operating expenses.... something is terribly wrong.

There is no advantage to financing....unless you dont have the cash.

And 0% is not 0%.

lukemelo216
09-30-2012, 11:08 AM
If you do 2-3 million a year and cant write a 40k check out of operating expenses.... something is terribly wrong.

There is no advantage to financing....unless you dont have the cash.

And 0% is not 0%.



Not true. I dont know what your company back ground/service mix is but wer are about 70% commercial installation work, meaning we work for a general contractor, but on those jobs you dont usually collect your money until 4-6 months after completing the job. I can tell you right now we are jsut getting checks in for jobs we did in the beginning of the year, and the jobs we are doing now we will see over winter. Plus in all of the commercial stuff, we have retention that is held, sometimes for 1 year even up to 2 years. So you cant just cut a check for 40k at the drop of the hat to get equipment when you have payroll, vendors, etc that all want a piece of the pie when you get a check in.

muddywater
09-30-2012, 11:29 AM
Not true. I dont know what your company back ground/service mix is but wer are about 70% commercial installation work, meaning we work for a general contractor, but on those jobs you dont usually collect your money until 4-6 months after completing the job. I can tell you right now we are jsut getting checks in for jobs we did in the beginning of the year, and the jobs we are doing now we will see over winter. Plus in all of the commercial stuff, we have retention that is held, sometimes for 1 year even up to 2 years. So you cant just cut a check for 40k at the drop of the hat to get equipment when you have payroll, vendors, etc that all want a piece of the pie when you get a check in.

Just doesn't seem very profitable if you never have any money in the bank. Even if you don't get paid on commercial jobs for a while, eventually you build your operating capital.

I don't gross as much as you, and I bought 90k worth of equipment and trucks this year with cash.

DVS Hardscaper
09-30-2012, 11:19 PM
Not true. I dont know what your company back ground/service mix is but wer are about 70% commercial installation work, meaning we work for a general contractor, but on those jobs you dont usually collect your money until 4-6 months after completing the job. I can tell you right now we are jsut getting checks in for jobs we did in the beginning of the year, and the jobs we are doing now we will see over winter. Plus in all of the commercial stuff, we have retention that is held, sometimes for 1 year even up to 2 years. So you cant just cut a check for 40k at the drop of the hat to get equipment when you have payroll, vendors, etc that all want a piece of the pie when you get a check in.

Ok, but if you continuously do commercial work you should have a routine where money is continuously streaming in, even if its a 90 to 120 day wait.

To me waiting that long to get paid, and to be a small amount of money - someone may wanna revisit their business model. With residential we get paid a percentage upfront, paid during, and pull away at completion with check in hand.
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wurkn with amish
10-01-2012, 09:06 AM
you people are funny......
everyone on here runs the highest profit business, can pay cash for anything. The dude explained why he does what he does, works for him. You "super duper" scapers out there coaching him even tho you've never seen his business operate or anything.

DVS Hardscaper
10-01-2012, 10:15 AM
you people are funny......
everyone on here runs the highest profit business, can pay cash for anything. The dude explained why he does what he does, works for him. You "super duper" scapers out there coaching him even tho you've never seen his business operate or anything.

And you don't know what who has seen what and who and who hasn't seen what / who

.
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muddywater
10-01-2012, 10:56 AM
you people are funny......
everyone on here runs the highest profit business, can pay cash for anything. The dude explained why he does what he does, works for him. You "super duper" scapers out there coaching him even tho you've never seen his business operate or anything.

I cant figure out how so many guys do millions, and have to finance everything.
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DVS Hardscaper
10-01-2012, 11:28 AM
I cant figure out how so many guys do millions, and have to finance everything.
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Or have you figured out how the ones doing under a million are able to pay cash? LOL

In the grand scheme of things we can learn more from those that have failed then we can from those who haven't. I find the failure stories more intriguing, better insight to reality.

.
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muddywater
10-01-2012, 02:37 PM
Yeah i am figuring out very few co that do over a mil have a very good profit margin!

I do remember idealscape out of nc posted for a while had 30-40 trucks and paid cash. Even had a d4 he bought new with cash. Pretty impressive. He was completely debt free with a 300k shop.

I do just over a mil w 10 employees and i pay cash for all my trucks and equipment. Of course i take a month or two on each purchase when buying used and find super deals that saves even more and helps my profit margin.
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Krafty
10-01-2012, 06:03 PM
Yeah i am figuring out very few co that do over a mil have a very good profit margin!

I do remember idealscape out of nc posted for a while had 30-40 trucks and paid cash. Even had a d4 he bought new with cash. Pretty impressive. He was completely debt free with a 300k shop.

I do just over a mil w 10 employees and i pay cash for all my trucks and equipment. Of course i take a month or two on each purchase when buying used and find super deals that saves even more and helps my profit margin.
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Also if you go back and read Idealscapes thread thoroughly he also states in there that he does finance equipment WHEN IT MAKES SENSE! I think what you are missing is that not in every situation is it the smartest financial decision to pay cash, and on the opposite side it is also not the smartest decision to always finance. A lot of companies that are a million dollar companies sometimes have their money tied up in other investments. To lay it out there for you in case that is not perfectly clear. This is a made up situation, but if I were to buy a new truck and for instance pay 2.9% interest on 50k. I can guarantee damn tee you I can invest that 50k in something else that is going to bring be a return of way more than 2.9%. Don't take this the wrong way Muddy this is not directed at you, but I firmly believe there is a big difference between a landscape/hardscaper and a business man. On this site I believe there are a lot more hardscapers then business men.

muddywater
10-01-2012, 06:54 PM
Also if you go back and read Idealscapes thread thoroughly he also states in there that he does finance equipment WHEN IT MAKES SENSE! I think what you are missing is that not in every situation is it the smartest financial decision to pay cash, and on the opposite side it is also not the smartest decision to always finance. A lot of companies that are a million dollar companies sometimes have their money tied up in other investments. To lay it out there for you in case that is not perfectly clear. This is a made up situation, but if I were to buy a new truck and for instance pay 2.9% interest on 50k. I can guarantee damn tee you I can invest that 50k in something else that is going to bring be a return of way more than 2.9%. Don't take this the wrong way Muddy this is not directed at you, but I firmly believe there is a big difference between a landscape/hardscaper and a business man. On this site I believe there are a lot more hardscapers then business men.

To me the truck or piece of equipment IS the investment. I can get a 20% return on another crew. I can't get 20% anywhere else.

What exactly are you going to invest 50k in that will get a better return than 2.9%??? Everybody acts like they are going to finance a truck then invest that 50k when in reality they don't have 50k in the bank and they don't know jack about investing.

And in this tumultuous economy which could take a crap at any moment, having debt is a terrible idea.

Here is ideal landscapes quote. Keep in mind he has 40 trucks.

We have been debt free since the beginning. The reason we are is because we DONT walk into dealerships, pick out 3 trucks and pay cash for them. We have bought what we need for the job and used it until it is time to replace it. Now John Deere has offered us 0% on a few skid steer loaders and we financed them for about a year, but that was just because it was 0%. Other than that, we pay cash. Again, do not get in over your head...just because you can finance a mower for $100/mo doesn't mean go get it. Really think about if you NEED it. Save your money and pay cash for it!

DVS Hardscaper
10-01-2012, 07:28 PM
Except there is no such thing as zero percent financing. The interest is baked into the product cost. The finance company will not write 2 weeks worth of loans at zero percent! I fell for that gimmick.
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DVS Hardscaper
10-01-2012, 07:29 PM
Round here many of the million dollar companies have had their supplier house accounts cut off. I find it hard to believe they're investing monies elsewhere. If that we're the case, their accounts would not have been shut down?

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muddywater
10-01-2012, 07:37 PM
Round here many of the million dollar companies have had their supplier house accounts cut off. I find it hard to believe they're investing monies elsewhere. If that we're the case, their accounts would not have been shut down?

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Same here, the big co have to pay with credit card or check per purchase bc they got 50-100k behind at some point.

i get better service and cheaper rates bc they know my check isnt going to be late and it isnt going to bounce.

I pay some of my vendors in greenbacks. Two of my subs on a big job took a cash discount and i made an additional 2k on top of them. Cash is king right now.

muddywater
10-01-2012, 07:40 PM
Except there is no such thing as zero percent financing. The interest is baked into the product cost. The finance company will not write 2 weeks worth of loans at zero percent! I fell for that gimmick.
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0% is like santa claus, everyone wants to believe its real, but it isnt.

Krafty
10-01-2012, 08:12 PM
....just another thought to mull over!

lukemelo216
10-01-2012, 08:19 PM
We usually do have a string of cash coming in becasue we do residential work which is always 50% and 50%, 33-33-33 on some larger or further scheduled out work. usually when it comes to financing its only about 3 years then we pay it off. Its hard in any business to just shell out 50k on one piece of equipment in the middle of the season. And the big reason we finance stuff is because we would rather make a payment on it and continue to be able to pay all of our suppliers to keep them under 90 days so we can continue to work with them.

I will say that this year we have made a big push to increase our residential sales becasue that is a constant cash flow for us, and as we proceed forward that is our goal with the company.

It works for us, and unfortunately we arent like everyone on here that just has piles of cash sitting around to pay for everything they by.

White Gardens
10-01-2012, 09:03 PM
Cash is all a mentality, a habit, and discipline.

Dave Ramsey is the man. http://www.daveramsey.com/home/

Basically, running your life on credit started in the late 60's early 70's. Before then it was all cash.

JC Penny's nickname was "Just Cash Penny ".

In the Bible, "The Debtor is a slave to the lender."

I always pay my suppliers the day I pick something up.

So, we run on cash. I only have one truck payment and that will be done with a nice lump sum payment at the end of the year.

I always buy used, work trucks and equipment get used and abused. If your buying new and trying to keep stuff pristine, then your just wasting time in your life.

I also work on all of our equipment. Occasionally I will take something to get worked on if I just don't have the time to do it, or if it will take more time for me to fool with it compared to the money I could be making.

01 C3500HD, 9ft plow, Central Hydraulics, and Under Tailgate salt spreader. 8k for the package and 40k on the odometer.

10k equipment trailer, 800 bucks.

05 F-150, 10k and 150k on the odometer.

04 Vermeer, S600TX and Backhoe attachment. 12k

Used leaf loader, 1k

06 Dixie Chopper run-behind, 2k and has done 12k worth of mowing this year. On top of it, it out-performs a new 60" Kubota diesel mower. (Raced another company :laugh:)

And I can go on about the little amount of money I've spent on equipment and the repair bills being minimal because of working on them.


..............

DEPENDABLE LANDSCAPING
10-01-2012, 09:14 PM
No one is 100% correct in theyre posts. All have valid points, but remember these are our opinions not facts. We all have different circumstances with our businesses. And the way we live our lives.
Good luck to all.
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alldayrj
10-01-2012, 09:15 PM
anyone have a like to this idealscapes thread? when I searched only this one comes up

zedosix
10-01-2012, 09:22 PM
Some of us inherited money and can afford anything so we just sit back and watch this thread and wonder "what is it really like to have to work and pay for something". lol

DVS Hardscaper
10-02-2012, 09:02 AM
Cash is all a mentality, a habit, and discipline.


In the Bible, "The Debtor is a slave to the lender."

I always pay my suppliers the day I pick something up.

So, we run on cash. I only have one truck payment and that will be done with a nice lump sum payment at the end of the year.

I always buy used, work trucks and equipment get used and abused. If your buying new and trying to keep stuff pristine, then your just wasting time in your life.

I also work on all of our equipment. Occasionally I will take something to get worked on if I just don't have the time to do it, or if it will take more time for me to fool with it compared to the money I could be making.


..............

The bible coincides with my saying that I write on this forum "all you're doing is working for the banks".

I will usually work my finances so that I do not have more than one loan at a time. I am that guy that had multiple loans out at once, that was way way way before the recession. Had I had all those loans during the recession I would have lost everything, guaranteed. About 6 months ago I had a customer say to me "wow you survived the recession, that's impressive", my response was "that's only because my equipment is paid for and I don't have a desk drawer full of payment books".

I also pay for all materials on the spot. I don't have a single account opened anywhere. I'm a demanding customer, sometimes I need to remind my suppliers "hey, I buy this and that from you and I pay on the spot, if you can't meet my demands then someone else will appreciate my cash.

I too do my own repairs and maintenance. You save a bundle right there.

But reality is hardscapes is a cut throat business. It's very hard to have the extra money to be able to buy equipment and pay cash. This is the first year I have been able to do so. But I had to make some changes. The recession was terrible for me, there were a few nights during the winter where my kid had to eat peanut butter and jelly for dinner because we had no money to buy real meals. And in the end, the recession turned my life around for the better, it forced me to try new ideas, and they're working! In maybe 4 or 5 years I may share my story on here, sharing everything starting with the bad to the good.
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muddywater
10-02-2012, 01:48 PM
I have had slower growth than some of my competitors because I pay cash for everything. Some say that is a bad business decision, but now they bounce checks with all their vendors or flat out don't pay them. What is the point of doing millions when you don't have a good take home? I want to grow a little slower watch that profit margin like a hawk.

And to me, my quality of life is just plain better with no debt. I am currently trying to pay off my house. I payed off my house prior to this one and my shop, and then I had to go and buy a mcmansion.

I agree with Ramsey the new status symbol isn't a bmw, it is lien free house.

stuvecorp
10-04-2012, 12:42 AM
I think the point being missed is it takes a lot of money to do this business(right). It isn't a stretch to have $100,000 worth of equipment/tools on the site to build a $10,000 wall or patio. I don't think you need all new equipment, there are good deals out there if you are patient or know what to look for. I also will over spend for equipment/tools if it allows me to get away from hiring guys but that is just me. And I just plain like equipment and tools.

Financing is a tool for the business but you can get in trouble with it, live by the sword and all. I had to learn the hard way but sometimes there was no other way to get equipment I needed. It's great if you can pay cash for stuff.

SRT8
10-04-2012, 01:24 AM
We try to buy everything cash if possible, and everything slightly used if possible.
All of our trucks are 05's or newer but they are all used except for a couple that we couldnt find good deals on used. Just last week i bought an 05 sierra 2500 duramax with only 40k miles and i only paid $17k. We search Craigslist like crazy trying to find good deals on used equipment. We are a good sized company that grosses over 2mil a year but just because we gross that much doesnt mean we will go spend $300k on trucks mowers and Bobcats.

DVS Hardscaper
10-04-2012, 08:59 AM
Speaking of buying used - I am starting to look for a John Deere compact track loader, with no more than 1500 hrs. If anyone has one or knows of one within 150 miles from MD let me know
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muddywater
10-04-2012, 12:22 PM
I have a new holland c185 with ac/heat, 700hrs, going to put new tracks sprockets for 22k.
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DVS Hardscaper
10-04-2012, 12:34 PM
I have a new holland c185 with ac/heat, 700hrs, going to put new tracks sprockets for 22k.
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I have a NH tractor that I love. But I could never own a NH skid steer. The nurseries love them - great for loading mulch :)


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muddywater
10-04-2012, 12:58 PM
Yeah i understand, i flip skid steers on the side. We use a takeuchi, and i am partial to them. I once bought a mustang mtl 16 for 10k w 1000hrs. The mustang and gehls are the same machine but dont seem to hold their value as well.
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neversatisfiedj
10-04-2012, 06:32 PM
Muddy - Do you buy from auction sites ?

muddywater
10-04-2012, 06:51 PM
Muddy - Do you buy from auction sites ?

nah just craigslist. I have to get them pretty cheap to flip them on ebay or sell them to a couple dealers I know.