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Old 01-01-2013, 01:55 PM
djagusch djagusch is online now
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Join Date: Mar 2006
Location: MN
Posts: 3,475
Quote:
Originally Posted by cpllawncare View Post
I'm so glad to see some of you guys get it, Dave you sound like me on some of the other threads, I get so sick of reading guys post about how they "have no overhead" It's impossible to run a business with zero overhead. My biggest guestion that I've yet to get answered is from a "general" standpoint what is the best balance of debt, obviously I'm going to get "NO DEBT" answers and that would be nice, but I truly believe it's a balance issue for someone like me who is trying to grow their business. I don't want to fall into the undercapitilized catagory OR the to much debt burden catagory, so there must be a middle catagory. I've sat down and ran my numbers over and over I have not come up with a good number for contuined growth, I know I can't charge $60 per man hr though and continue to grow, new work would come in so slow I would end up drowning, that's where I figured 45 per man hr for a two man crew figured about right. I still make a decent profit but it's not so high that it scares away potential new clients. I can close about 60% of my deals with this number.
My banker put the debt issue to me like this. He has never seen a mid to high growth company do so without adding debt. You just can't do it.

Very slow or steady sales you can get the debt down but takes discipline to do so.

What I have noticed is some companies do the high growth for a yr or 2. Then see them flatten the growth or slightly retract (during this time I think they are thinning the bad accounts out and managing to get debt down). Then you see the high growth again. Sort of a cycle, each level I think takes different turns in the buisness system they need in place or change to adapt for the next growth cycle.
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