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  #31  
Old 09-28-2012, 12:31 AM
swampdonk swampdonk is offline
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I totally agree with DVS. I see many first timers with nicer trucks than I have. But in about 4 yrs. those trucks are no where to be found. I have never purchased a new piece of equipment (outside of small items) since being in business. Not by choice, I just didn't have the money or anyone that would co-sign for me. I am thankful that my parents didn't help me out when I first started. I learned how to save and make practical decision's when purchasing.
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  #32  
Old 09-28-2012, 12:35 AM
swampdonk swampdonk is offline
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Start looking around for a piece of equipment before you need to buy. More than likely you will stumble on a good deal. The worst time to buy a piece is when you need it. You will most certainly make a hasty decision and pay to much.
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  #33  
Old 09-28-2012, 06:55 PM
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GreenI.A. GreenI.A. is offline
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I don't know why any body would complain about new guys getting into the business and getting all new equipment. When these guys go under and the repo men come, the equipment has probably seen little hours and the trucks probably have little use damage. That's when others get to step in and buy the slightly used cheap.

This spring I picked up a couple almost brand new plows on craigs list. They were all from guys who bought last fall/winter for extra income and when we didn't get any snow they couldn't afford the payments and needed to unload them quick. I picked them up cheap, turned around and sold them for what they were worth. Made some nice easy cash. I've done the same with a couple enclosed trailers as well.


As far as justification for spending money for trucks with all the bells and whistles. I spend a lot of time in my truck, it's not only my transportation but for the most part it's my office as well. It's were I do 95% of my phone calls, billing, scheduling, designing, I like to be comfortable in it. It's a 07' f250 crew cab lariat, I bought it in 10' when it had less than 40k miles on it. A few guys I know thought I was crazy getting a 3yr old lariet, tried to tell me to go with an older XLT. But the amount of time and miles I do, I couldn't disagree more. I have been looking to trade it now for an 2011-2012 slightly used crew cab f350 lariat. If business was a little better this year I would be driving a brand f350 or 450 lariat.
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  #34  
Old 09-29-2012, 12:56 PM
lukemelo216 lukemelo216 is online now
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Quote:
Originally Posted by SVA_Concrete View Post
Why on earth do you folks spend so much on equipment.

spinning off another thread:



In my humble opinion you paid too much for your truck and skidsteer, and trailer.

Why guys like me sell jobs for less, with good profit:

Truck 17k
trailer 2k -equipment
trailer 4k (16 foot dump, hauls ex)
5 ton ex 24k
CTL 29k
dump truck -per load as needed 75-90 a load
matls deliv - supplier provided save labor vs fetching matls

Ive got more equip, for less money. and its not out of date,
2005 truck (cummins 5.9)
2007 CTL (600 hrs)
2005 5 ton ex (2500 hrs)
2005 ish trailers.

79K vs your 200k, my overhead is probally 1500 a month lower than yours, and I have an excavator in this list.

now I don't have cabbed units, power windows, etc. But I can still get to the job, look professional and move the earth just as well.


I should have probably explained better and I misquotted a little too.

We are not a brand new company. We have been in business for over 20 years and are a multimillion dollar per year company. The equipment I listed above is our average crew, we run 6.

We have 2 commercial construction, 1 residential construction, 2 maintenace, 1 commercial construction service/maintenance crew, and two full time truck drivers.

Our three construction crews run with f550s with enclosed tools trailers, our commercial maintenance has an f350 dump with 28' enclosed, and our other maintenance crew runs with a f250 and 14' enclosed. Then our commercial service crew used an f250 with small enclosed trailer. We also have our hydroseeding rig, plus a few misselaneous f250s and about 35 guys to run with

Then our two truck drivers have a Peterbuilt and a Freightliner. They move all of our soft (have our own 100 acre nursery) and hard goods, plus our 4 skids, dozer, and backhoe.

All of our trucks run from 1998-2005's and are bare bones. All of them are paid off and have an average of about 115k on them, so there is still plenty of life on them. Both the backhoe and the dozer are around 25 years old and have about 2500 hours on them each and our skids are anywhere from 1-5 years old.


I agree it is stupid to be brand new and have all of the newest flashiest equipment out there, but after you have been in business for 15+ years you have a good idea of whats going on. We always weigh the options of new vs used, and 95% of the time we go new (pay it off in 3 years) and then have a solid piece of equipment on the road for another 10 years.
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  #35  
Old 09-29-2012, 10:38 PM
muddywater muddywater is offline
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I stll dont understand why you would finance. Doing several million a year, and if profitable why not just write a check?
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  #36  
Old 09-30-2012, 12:24 AM
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GreenI.A. GreenI.A. is offline
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Quote:
Originally Posted by muddywater View Post
I stll dont understand why you would finance. Doing several million a year, and if profitable why not just write a check?
For some companies there are very good reasons to finance rather than pay cash. Even a company doing a couple million dollars a year does not necessarily have the capitol sitting in their account to just drop 40k on the truck they need, it is much easier on there wallet to pay the extra annually for interest instead. If your shopping at the right time of year, when new models are coming out, the manufacturers are usually offering 0% on leftovers if you qualify. Yes paying cash, is cheaper than paying interest, but not always. When I have bought new trucks in the past, I always told the salesman I was paying cash when we negotiated a price. Only after a good price was agreed upon would I ask about financing. Then I would tell them I would finance the vehicle with them if they off set the interest percentage.
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  #37  
Old 09-30-2012, 12:35 AM
muddywater muddywater is offline
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Quote:
Originally Posted by GreenIndustryAssociates View Post
For some companies there are very good reasons to finance rather than pay cash. Even a company doing a couple million dollars a year does not necessarily have the capitol sitting in their account to just drop 40k on the truck they need, it is much easier on there wallet to pay the extra annually for interest instead. If your shopping at the right time of year, when new models are coming out, the manufacturers are usually offering 0% on leftovers if you qualify. Yes paying cash, is cheaper than paying interest, but not always. When I have bought new trucks in the past, I always told the salesman I was paying cash when we negotiated a price. Only after a good price was agreed upon would I ask about financing. Then I would tell them I would finance the vehicle with them if they off set the interest percentage.
If you do 2-3 million a year and cant write a 40k check out of operating expenses.... something is terribly wrong.

There is no advantage to financing....unless you dont have the cash.

And 0% is not 0%.
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  #38  
Old 09-30-2012, 12:08 PM
lukemelo216 lukemelo216 is online now
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Quote:
Originally Posted by muddywater View Post
If you do 2-3 million a year and cant write a 40k check out of operating expenses.... something is terribly wrong.

There is no advantage to financing....unless you dont have the cash.

And 0% is not 0%.


Not true. I dont know what your company back ground/service mix is but wer are about 70% commercial installation work, meaning we work for a general contractor, but on those jobs you dont usually collect your money until 4-6 months after completing the job. I can tell you right now we are jsut getting checks in for jobs we did in the beginning of the year, and the jobs we are doing now we will see over winter. Plus in all of the commercial stuff, we have retention that is held, sometimes for 1 year even up to 2 years. So you cant just cut a check for 40k at the drop of the hat to get equipment when you have payroll, vendors, etc that all want a piece of the pie when you get a check in.
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  #39  
Old 09-30-2012, 12:29 PM
muddywater muddywater is offline
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Quote:
Originally Posted by lukemelo216 View Post
Not true. I dont know what your company back ground/service mix is but wer are about 70% commercial installation work, meaning we work for a general contractor, but on those jobs you dont usually collect your money until 4-6 months after completing the job. I can tell you right now we are jsut getting checks in for jobs we did in the beginning of the year, and the jobs we are doing now we will see over winter. Plus in all of the commercial stuff, we have retention that is held, sometimes for 1 year even up to 2 years. So you cant just cut a check for 40k at the drop of the hat to get equipment when you have payroll, vendors, etc that all want a piece of the pie when you get a check in.
Just doesn't seem very profitable if you never have any money in the bank. Even if you don't get paid on commercial jobs for a while, eventually you build your operating capital.

I don't gross as much as you, and I bought 90k worth of equipment and trucks this year with cash.
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  #40  
Old 10-01-2012, 12:19 AM
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DVS Hardscaper DVS Hardscaper is online now
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Quote:
Originally Posted by lukemelo216 View Post
Not true. I dont know what your company back ground/service mix is but wer are about 70% commercial installation work, meaning we work for a general contractor, but on those jobs you dont usually collect your money until 4-6 months after completing the job. I can tell you right now we are jsut getting checks in for jobs we did in the beginning of the year, and the jobs we are doing now we will see over winter. Plus in all of the commercial stuff, we have retention that is held, sometimes for 1 year even up to 2 years. So you cant just cut a check for 40k at the drop of the hat to get equipment when you have payroll, vendors, etc that all want a piece of the pie when you get a check in.
Ok, but if you continuously do commercial work you should have a routine where money is continuously streaming in, even if its a 90 to 120 day wait.

To me waiting that long to get paid, and to be a small amount of money - someone may wanna revisit their business model. With residential we get paid a percentage upfront, paid during, and pull away at completion with check in hand.
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