Originally Posted by tenderman
Can anyone tell me what a large lco or a small lco consists of? How big? How many accounts? ETC?
I dont think there is any set standard.
Thats why its so hard.
You dont know that once you hit 200 accounts your expenses are going to triple and you;ll be holding on for your life.
Its different for different people.
Different circumstances too.
I used to pay 1500 a month plus utilities for a shop and office. Thats a lot of lawns to pay for that.
How about the guy...lets say...whos parents own a farm and he can park all his stuff there for free...
Hes ahead of the game.
Me...I bought a house that is on 4 acres of commercial property with a barn. I moved my office which is a construction trailer and everything I own here.
The business still pays rent but it pays rent to me and that goes to a mortgage for something I own.
Instead of 2 electric bills I have 1. instead of 2 internet bills I have 1. etc etc.
Instead of my personal salary paying all the mortgage like i did for years, the business now pays most of it in rent.
So the business saves in rent and utilities and I save personally because of the rent income.
Before I bought this place I didnt have a choice. I couldnt operate out of my house at the time. So I had a mortgage and on top of that the full boat shop rent and all the extras that come with that.
I now buy used older trucks. They cost me a fraction of what the newer stuff did.
My hobby is mechanics. So ill buy a 1995. Pay cash for it. Tune it up. Paint it my colors and down the road it goes. No payments, cheaper insurance.
If work slows down, I dont have payments over my head. The truck can stay parked and doesnt cost me a thing.
I dont finance equipment anymore. Same thing. Buy used, make it good as new and no payments, no worries.
I no longer will carry employees. If work is slow, they go home. I spent way too much money making busy work for them and that comes right off the bottom line.
That makes me work harder. If I dont have work for the employees....they dont make money....if they dont make money....they wont stay.....
So I have to make sure I sell enough work for them....And when theyre working im making money....so its all benefit...
See, all these changes I made were out of necessity. And I would have never made them unless my last business crashed.
Your mind and the calculator will play tricks on you.
When you think about buying that new truck or new mower, you will whip out the pen and paper and calculator.
When you do the numbers and figure in the payment......It will look like a no-brainer....You can buy it and the benefit of the machine will outweigh the cost....
Oh how many times I did that. And to top it off my major was accounting.
Its little decisions you make all along the way that come together almost all at once and then you;re sitting there saying "What the hell happened?" "I was on top of the world a couple months ago"