View Full Version : How to spend $10,000 on my new business
01-10-2004, 09:32 PM
I am trying to get my hands on a miminum of $10,000 which will be a problem cause I really dont have credit yet, but Im not giving up, anyway, if I get it, I have no equipment yet so what should I get and what are the average prices
01-10-2004, 09:38 PM
Depends on what you plan to do, and the size and number of client sites you plan to service. Also, the decisions you make about the initial investment could have long term implications, so you should have an idea of how/if you plan to grow in the near future.
01-10-2004, 09:56 PM
Do you have any clients? I would have to say if you dont have much work that you do not need to go and try to aquire $10,000 line of credit. start out slow you didnt say what type of work you are getting into Im, assumming its mowing grass and you can get a good comm. mower for about 500.00 to 1000 a trimmer 250 to 300 blower 150 to 500. what im trying to tell you is dont go into debt. buy only what you need and it will pay for itself and you can buy as needed as you grow
01-11-2004, 02:34 AM
Another recent post of mine on this subject.
Registered: Sep 2000
Location: Memphis, TN
I agree, don't buy cheap stuff that you will buy again. One of the biggest expenses will be buying things twice. Get good stuff first. But...Don't over spend. One thing a lot of people do is assume they will make a killing right off. Then they find that the heat, hard work and customers are harder than they thought. Its not like cutting your own lawn on saturdays. This is a job for the strong. 40+ hours a week is a lot on a person. Don't spend so much that if you change your mind your out $10k. Spend wisely. You can get by with a good used w/b. You don't need a big fancy trailer. A small one will do. One thing about trailers, they are easy to sell when you need bigger. Especially small ones. Everyone with a 4wheeler wants one. Get one new trimmer to start on day one. After you build some work up then the cash flow will allow you to buy another one if needed. You only need one new bp blower on day one. If you don't have any need for new hedge trimmers yet, don't get them until needed. The small engine shop has them in stock. Get one good stick edger and it will last you a long time. Just because you have $10k burning a hole in your pocket doesn't mean you need to spend it all for DAY ONE. Cash flow is the game in this business. Don't flow it all out right away.
Misc expenses--$400 this is for gas cans, extra blades, trimmer line, edger blades, tools needed to work on equipment and change blades, oil, filters, 2 cycle oil, toolbox, whatever
If you don't have a truck, find a used one. Doesn't have to be the best and I sure wouldn't buy a new one just for this and starting out.
If you decided in mid season you didn't want to do this afterall you don't have $10k invested that you will not get back out of it. Worst case, you can keep the equipment for your lawn and never have to buy anything ever again.
One other thing...reward system. I have a reward system in mind as I hit different levels. If you buy everything right off the new does wear off eventually. I started small and as I put my dues in and worked my butt off I generated enough to buy a ZTR. It was a nice reward. This fall after using 1/2 ton trucks these years I bought a new F250. Its good to have goals, it keeps you going. It also keeps you from going bankrupt trying to keep up with the Joneses.
Registered: Sep 2000
Location: Memphis, TN
My suggestion then comes from building this business and my finance and accounting background...
1. Don't finance. Pay cash. Being small one of the worst things is paying payments on things. Strap you for cash. Cash flow is king. Cash flow will make or break your business. I have given all types of advice about how to start. Everyone is different. I NEVER tell people to take on debt if they can help it. You see a lot of people here that have been in this industry for a long time, but there are tons that failed. Tons that decided this isn't for them long-term. What have debt to pay on that can help you fail. Some cases a ZTR or Stander might be right when starting out. Some cases it isn't. I let my w/b's work at much lower operating and upfront cost than a ztr and then bought the ztr when needed and the cash was there.
2. What type of mower? That is up to you what brand you want. I would buy a 36" eXmark w/b belt drive. Why belt? A 36" mower with the type of properties you have now and probably will grow into later will mean this mower in the future will not be used all the time. Don't spend and extra $2k for a hydro that will eventually be a gate only mower when you grow into a ZTR. A 36" belt is almost bullitproof. They have very little go wrong with them. Very simple machine. So you have to pull some to reverse. No biggie. You could pay cash for one and have NO DEBT. It will be faster than the garden tractor your using now. The cut of the comm'l grade equipment should be nicer also. Years ago I cut with a garden tractor, I know the time difference with a w/b, even a 36" with sulky. My 36" belt has been thru 4 full seasons and has only cost me oil changes and air filters. The original belt and everything on it. That means ZERO downtime. That is money in the pocket. As you grow and get more properties a bigger deck ZTR would be the way to go. You would then have all bases covered and the money to purchases it outright. Your setup would then be able to handle big and gated areas effeciently.
This is my opinion, some may disagree. I can guarentee this though, its a tried and true method. Other ways may not be wrong, but they put a lot more risk into the equation. Nobody ever went wrong buying what they could pay for verses extending themselves with debt.
01-11-2004, 11:53 AM
I agree with Hoss, buy what you need, as you need it, and pay cash if you can. I dont do mowing altho I do have some equipment that would be suited for it. I have a full time job that I have invested 27 years with and will have my retirement fully vested in three more years. I started my company two years ago with the goal of going full time at the end of five years. I started out with a 500gal jet agitated hydroseeder that I paid cash for. Since I do have a full time job to fall back on I have invested all of my profits back into the hydroseeding business, buying another seeder, trucks, trailers, tractors, ect.. Each of these purchases have been paid for out of my company account with very little finacing involved. I hope to have everything I need to make a living and have it paid for at the end of those three years.
My advice to you would to be to set some long time goals and build up to them. It takes a lot of the risk out of building a company just knowing that you dont have to be the biggest or the best on day one. There is nothing wrong with buying good used equipment and using that as a foundation to build your company on. Most of the people that I know that havent made it in business thought that they had to have the best equipment available to start with and then found that after making the payments on that equipment that there wasnt anything left to live on much less grow there business. That left them lookin for other sources of income and they eventually where forced to sell that expensive equipment and abandon their business venture.
DFW Area Landscaper
01-11-2004, 05:40 PM
Here's another good thread on this subject:
DFW Area Landscaper
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