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View Full Version : LOANS!!!!!!!!!!!!!!!!!!! Spending $$$$$$!!!


eggy
08-27-2000, 01:59 PM
Well just wondering how many of you are operating on a pay cash basis for your equipment...I would find this impossiable to start a sucesfull buisness and do this and even somewhat silly..I think I have realized that in this buisness it is overwhelmed with labors...but hardly no buisness people. Also I would really like to see how many of you are incorporated....thanks!

bob
08-27-2000, 04:33 PM
On your "incorporated" comment, do a search. We just had this question about 2 weeks ago.

P.S. I'm not incorporated.

Kent Lawns
08-27-2000, 04:50 PM
Why would you pay cash for equipment? (Unless you have surplus $)

Most dealers/manufacturers have promos for 0% for 6 months or low % financing. Even straight thru leasing companies rates are pretty attractive.

Use your cash for "non-finacable" items.

dhicks
08-27-2000, 06:31 PM
I have paid for all of my equipment with ca$h. I don't like debt and 10-21 percent interest rates. Just a personal preference for my lifestyle and business.

accuratelawn
08-27-2000, 08:52 PM
I am debt free.. Truck ...everthing
When I started out I took advantage of 6 month no interest and no payment to get going. Bought two mowers this way.

tlcgrounds
08-27-2000, 11:15 PM
Yes I have to admit there are a lot of laborers and few business men. The diffrence is common sense. A lot of the guys just mow mow mow. If they need mor money they get a bigger machine and another guy and most of the times that doesn't work. to run your business effieciently we need to look at our hourlys what they actually are and not what we like them to be. our costs and find ways to mimize our costs and maximize profits. Every area has a dirrent combination of machines labor force and size of properties and whhat those properties expect from us. from there we need to judge these factors to decide what the delicate balance of work load and equipment are. Then you need to track your progress and adjust your gameplan accordingly.

eggy
08-27-2000, 11:41 PM
Bob I know we talked about this a few weeks ago I was impressed by what little people know about buisness..They can mow grass and this is a great site for those tips..but buisness tips are few....I guess I just seek informnation on the bottom line....How long did it take you guys to see a profit it seems that all we do is by more equipment which is needed.....sales are good..but winter is long here about 4 months ...this kills a guy....it just seems after expenses the cash isnt really there....maybe we are paying cash to often and need to get more cash flow ..who knows...

Yardworks
08-28-2000, 12:26 AM
Everything I have is paid for except for my JD M653 ztrack. The Ztrack is a 0% interest deal for a year. My motto is whenever you can use someone elses money for free, do it. If I can't use money for free I pay for it. All that saved interest just adds to the profit margin.

jaclawn
08-28-2000, 07:23 AM
One problem that I see is that many contractors fear debt. They would rather put up their money to pay for a piece of equipment, than use someone elses for a fee. I really can't balme them, IF, they have the cash to do so.

Many times, guys will use too much cash to purchase something, then not have adequate working capital to operate off of. This gets a lot of contractors in trouble, they will pay cash for a large purchase, then have to borrow to pay every day operating expenses. Maybe they don't borrow per say, but they may use a credit card, and carry a balance to the next month...

It is also a good idea to have an extra cash reserve for a rainy day. You never know when you will need your money, so hold on to as much of it as possible.

BTW- Those same as cash offers can be great, if you can pay them off in time. Check the fine print though, some will stipulate that if you do not have the balance paid in the free period, the interest accrues from the day of purchase, and usually at a higher rate than if you financed it traditionally.

[Edited by jaclawn on 08-28-2000 at 10:25 AM]

Twotoros
08-28-2000, 10:07 PM
If the purchase is under 2 k I pay cash. Over I use a leasing company that bills only six months out of the year i.e. during my working season . Last time was for a 36" snow thrower and I was billed during winter months for two and a half seasons. Works for me.

EarthWorks
08-28-2000, 10:58 PM
Helps to look at what financing will cost you vs. how much the new machine can make. I usually finance larger items over 4k. I finance for a long period then as cash becomes available make the pay off early. I end up having a piece of equipment when I need it and losing very little money due to interest. I also push my banker for the lowest interest rate. This is one thing I think a lot of people don't do. Sounds like you are growing a business by investing in equipment. Don't get discouraged it will pay off in the future. Sure there will always be equipment you would like or need but once you have a good set up you can do jobs faster and better thus a raise in income. That is how I see it anyway. As far as incorporating, best thing is to find a good accountant and get his advice. He will probably recomend it.

thelawnguy
08-28-2000, 11:11 PM
Of course he will recommend it-corporate tax law is so complicated you will have no choice but to pay him dearly to file your taxes, and oh yes through the magic of "accountant wizardry" he will show you how, by paying him 1000's of $$$ you will actually come out ahead. Yeah right.

Check into an LLC if available in your state.

EarthWorks
08-28-2000, 11:29 PM
Well I knew I was setting myself up for that one. Oh well I still stand by my answer. I would rather spend my time doing what I do best than try to figure out some idiotic tax system. You expect your customers to call in a professional to do mowing/landscaping so why wouldn't you call in a professional to do something you are not familiar with?

[Edited by EarthWorks on 08-29-2000 at 02:32 AM]

Guido
08-29-2000, 02:01 PM
Hey guys, I don't think we solved the inc. or not discussion before so I'm going to start a new thread to try to find the advantages and disadvantages of the different types of business set-ups. Please share your ideas there. Maybe we will all learn something new!

greenflag
08-29-2000, 02:21 PM
We use both cash and leasing. The main advantage that I see lease vs loan is you can deduct your entire lease payments for the year. We have a buy out option at the end of the lease $1.00 I think. With a loan you can depreciate the equipment. Put a pencil to it see what works to your advantage. I can give you the number of a good leasing company. They had me approved and I had my equipment in less than a week.

Garry S. Smith

eggy
08-29-2000, 09:36 PM
Guido I agree I would like to here more on the Inc. part of buisness or the LLC, I think we all should think more on the lines of buisness...i do belive we all are knowledgable about mowing.....but I will admit my finaces are out of wack money going here coming in there...expence here...write of this....loan for that ...pay cash for this...maybe I need a cpa.....??????

thelawnguy
08-29-2000, 11:24 PM
"why wouldn't you call in a professional to do something you are not familiar with?"

Then familiarize yourself with the accounting part. Take a short class and learn the basics. Once you understand the basics, and whats going on, the "mystery" is gone and you will kick yourself for shelling out huge dollars for some egghead to do the stuff for you.

BTW he probably uses the same program that you can "borrow" from Usenet for free.

bucktail
08-29-2000, 11:33 PM
Inc. it's the only way to go! protect yourself since people asked for advice here it is Inc. yourself own all assets yourself and lease them to the corporation if God forbid anything should happen trying to sue an entity that owns nothing is like pissing in the wind!

EarthWorks
08-29-2000, 11:41 PM
And maybe lawn care customers could go out and buy a new ztr and cut their own grass. Then they would kick themselves for paying you big money all those years for mowing it for them. Oh and they could even take a short class on how to fertilize and do weed control and install a sprinkler system and .......

[Edited by EarthWorks on 08-30-2000 at 02:43 AM]

kutnkev
08-30-2000, 12:02 AM
if anyone wants this type of info or help with the business side call your local S.C.O.R.E. office they are free and provide excellent advice no matter if you are thinking of starting or are growing you business. they are part of the S.B.A. their seminars are about 35.00 and well worth it. try them before wasting money on "consultants" .they also have a free catalog-The Resource Directory for Small Business Management it has all the publications and video tapes they offer on a host of business topics. I have learned so much from you guys on this site. feels nice to contribute for a change. hope i didnt go too long.

SBA Home Page http://www.sba.gov

U.S. Business Advisor http://www.business.gov

hope I was of some help

eggy
08-30-2000, 12:43 AM
Hey nice sites, thanks.....who knows maybe i am doing it wrong paying taxes on everyting having right ins. looking to inc. who knows...maybe thats what is confusing...I can be sure hardly no other so called lawn care company here does much of that