Paying cash is a mindset
All my harping on financing and I don't think I really touched on this. In my mind when you finance something happens in your brain. Whether it is 0% or 2%. You are telling your mind it is ok the buy something you cannot afford. I think it is much healthier to save and pay cash. Yes it may slow your growth, but it forces you to save money. And it forces you to examine your profit margins to be able to put money away. I see so many companies that continue to finance... and it never ends. By paying cash, it forces you to look at the actual cost of the asset. How many of us would actually write a check for a 40k truck? That is alot of work to save that kind of money. And it forces me to evaluate whether I really need a truck with 0 miles or a truck with 50k miles. If the one with 50k miles is half as much, is it really worth spending 50k on one with 0 miles? Do I really need to spend 60k on a new skid steer or can I spend 30k on one with 300 hours?
I was eating lunch with a mulit million dollar property investor the other day, and he said "they can't take it from you, if you don't owe them anything." And in this business, if you don't have any debt you are really impervious to any economy swings.
I have bought equipment from several landscape companies that lost everything due to the housing crash. They went from 10 financed skids to 0. Some of them owned impressive businesses but now have nothing to show for it.