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  #101  
Old 10-21-2012, 07:12 PM
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phillie phillie is offline
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Quote:
Originally Posted by larryinalabama View Post
Ive never seen a debt free business go bankrupt. So Ill just be ignorant and debt free.
That doesnt mean they succeed or have longevity. Just because working debt free works for you and your desired level of success does not mean it works for everybody. To answer your question, NO, a mower payment does not sound stupid. Some of the ignorant comments on here do though.
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  #102  
Old 10-21-2012, 07:43 PM
larryinalabama larryinalabama is offline
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Quote:
Originally Posted by phillie View Post
That doesnt mean they succeed or have longevity. Just because working debt free works for you and your desired level of success does not mean it works for everybody. To answer your question, NO, a mower payment does not sound stupid. Some of the ignorant comments on here do though.
Being debt free elimanates a lot of RISK. Nothing guarantees success in this business or anyother business. A lawnmower that has attached payments to it doest cut grass anybetter that one that is paid for. I just bought a Toro Grandstand with 62 hours for 4200$, why should I spend 8000, but even a 8k I would have paid cash. I have more that enought equiptment to add a seperate crew from my operation, but I also have other interestets to keep up.

Cash will alaways land you a better deal; than credit, say you find a 10k exmark on craigslist for 5k, think the ferrler is going to wait while you go beg your bank for a loan???

For me its about "ownership", I own my business and can take it to any level I want without worring about payments.

Then it boils down to the fact that if you cant afford a "lawnmower" you shouldnt be in this business.
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  #103  
Old 10-21-2012, 08:17 PM
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grandview (2006) grandview (2006) is offline
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Quote:
Originally Posted by larryinalabama View Post
Being debt free elimanates a lot of RISK. Nothing guarantees success in this business or anyother business. A lawnmower that has attached payments to it doest cut grass anybetter that one that is paid for. I just bought a Toro Grandstand with 62 hours for 4200$, why should I spend 8000, but even a 8k I would have paid cash. I have more that enought equiptment to add a seperate crew from my operation, but I also have other interestets to keep up.

Cash will alaways land you a better deal; than credit, say you find a 10k exmark on craigslist for 5k, think the ferrler is going to wait while you go beg your bank for a loan???

For me its about "ownership", I own my business and can take it to any level I want without worring about payments.

Then it boils down to the fact that if you cant afford a "lawnmower" you shouldnt be in this business.

No problem here. I'll just go grab cash from my credit line.
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  #104  
Old 10-21-2012, 09:47 PM
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cpllawncare cpllawncare is offline
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Like so many things it's about choice's, some people would rather run debt free, some don't mind some debt, I myself like a balance, you can't eliminate risk, you just have to manage it. One thing I've found, some debt will keep you on your toes, no debt makes you lazy and not as apt to seek more business at least for me.
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  #105  
Old 10-22-2012, 01:19 AM
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GreenI.A. GreenI.A. is offline
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Quote:
Originally Posted by grandview (2006) View Post
No problem here. I'll just go grab cash from my credit line.
my sentiment as well. I was looking at a new truck recently. For ***** and giggles I let the sales guy run my credit to give me an interest rate. He came back at more than 1.5% higher than the rate I have on my open open credit line. Granted it was a used lot, so they weren't offering the low rates that most new manufacturers offer. It's nice to have the security to know the money is in the bank for a rainy day. And if those rainy days exztend to far or you have an emergency, it's nice to know you have a open line of credit to meet payroll.
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  #106  
Old 10-22-2012, 11:04 AM
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PROCUT1 PROCUT1 is offline
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There is nothing totally wrong with using credit. There is nothing wrong with going all cash.
If you keep things in moderation and in control.
If you approach it in a smart manner, and realize the dangers.

Everything I have ever written on here in my "infamous threads" has not been preaching my way of doing things. Its been about opening other peoples eyes to common mistakes that creep up on you. They creep up on 90+% of businesses and thats why they fail.

I choose not to use credit, though by now with my experience I could do so in a smart way. Its my personal choice and it my business. I just like it that way.

I could grow faster with it, but there is something about money in the bank that I like better.

My whole set of threads a few years ago talked about the problem of business slowing down and bills staying the same. Thats a scary feeling.

There are so many temptations I have now in my new business and new area.

I used to have a big shop and a big office when I was doing the amount of business I have now. I want one bad right now. I rent a small fenced lot and a shipping container. My office doubles as my laundry room in my house.

I had a new truck every year for a personal truck. Now I drive primarily my 04 ranger.
I had a shiny fleet of newer trucks. Now I run mid 90's trucks.

But you know what? I am growing like crazy, I am sucking work up left and right and have a reputation that Im proud of.

My suppliers who didnt know me last year and would only take cash, I can sign for anything I want and I pay my bills in a day or two like clockwork. They treat me like a rockstar when I go in there.

I run my older fleet of trucks and the other contractors laugh with their big shiny new trucks. Yet, I am the most hated person in the business here. Because they keep hearing "Sorry, we awarded the contract to Joe"

Everything is relative.

I do high end work, complicated work, work that takes a lot of selling and convincing to get. Then my crew rolls in in our 90's equipment. And does a job that is picture perfect.

I dont think the year of my trucks had a thing to do with it. Theyre all lettered, all the same color, and no panels falling off. And I paid less for all my trucks combined then I paid for one new one years ago.

So I dont think we need to talk extremes. Its not a 2012 vs a 1978 rust bucket.

But nobody is going to look at my 1999 chevy or 1994 box truck or any of the others and say I need to go with the guy with the 2012.

Im up 1000% in business this year over last year (my first in my new area)
I moved here with some old equipment, no business, and no money. And trashed credit.

My way isnt the only way. I just like it. When Im making a presentation, customers dont know I operate out of my laundry room and a gravel lot.

But the end result of their job is what they see.

Ive done it all before. Now I run my business hard core simple. Money in, money out, bank profit, make a wishlist and save for it. Buy it once and own it.

I can sleep at night. I can make payroll every week. I get bills in the mail, I dont have to wait for the next check or use my credit line. I write checks right at the post office and stick them back in the mail.

After going through what I went through. Im loving this.
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  #107  
Old 10-22-2012, 12:07 PM
CL&T CL&T is offline
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If you have the work and are flush with cash I can see your position. But I can also see a company financing equipment that has the work, doesn't have the equipment to do it and doesn't yet have the cash reserve.

I look at it this way; if they didn't have the equipment they couldn't do the work. If the work doesn't pan out worst case they lose the equipment. If they spent their own money and the work didn't pan out they would have equipment sitting there worth less than what they paid for it and no money in the bank to salvage the business. So this is an example of of letting someone else take the risk instead of you. I'm also of the opinion that with what the banks and financial industry did to this country I have no problem screwing them for a change.
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  #108  
Old 10-22-2012, 12:26 PM
32vld 32vld is offline
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"If you have the work and are flush with cash I can see your position. But I can also see a company financing equipment that has the work, doesn't have the equipment to do it and doesn't yet have the cash reserve. "


Getting a new account and getting a loan to get that equipment because they can afford to pay off the loan even if they lose that account is one thing.


"I look at it this way; if they didn't have the equipment they couldn't do the work. If the work doesn't pan out worst case they lose the equipment. If they spent their own money and the work didn't pan out they would have equipment sitting there worth less than what they paid for it and no money in the bank to salvage the business. So this is an example of of letting someone else take the risk instead of you. I'm also of the opinion that with what the banks and financial industry did to this country I have no problem screwing them for a change."


Another way to look at it if the work does not pan out the equipment gets repo'd. Their credit score goes down the drain. So the next time they want a loan instead of getting a loan at 5% they will be offered loans at 19% because of their bad credit history.

If they bought that machine cash and the job went bad that machine would sit in their yard until they got more jobs as the one they lost. They could tell the customer we have the equipment and can start tomorrow to close the deal.
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  #109  
Old 10-22-2012, 01:22 PM
CL&T CL&T is offline
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Quote:
Another way to look at it if the work does not pan out the equipment gets repo'd. Their credit score goes down the drain. So the next time they want a loan instead of getting a loan at 5% they will be offered loans at 19% because of their bad credit history.

If they bought that machine cash and the job went bad that machine would sit in their yard until they got more jobs as the one they lost. They could tell the customer we have the equipment and can start tomorrow to close the deal.
Or they could continue paying the note from the cash reserve they still had while they actively search for more work or sell the equipment.

It all boils down to what kind of business person you are, how you protect yourself and your business, how you manage risk and what risks you are willing to take.

It's kinda like bungee jumping. Some will have no problem and trust the bungee cord won't break. Others will never want take the risk. But you can't say that everyone that bungee jumps will die so no one should do it.
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  #110  
Old 10-22-2012, 05:17 PM
larryinalabama larryinalabama is offline
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Join Date: Jan 2008
Location: Ragland Al
Posts: 10,216
Quote:
Originally Posted by PROCUT1 View Post
There is nothing totally wrong with using credit. There is nothing wrong with going all cash.
If you keep things in moderation and in control.
If you approach it in a smart manner, and realize the dangers.

Everything I have ever written on here in my "infamous threads" has not been preaching my way of doing things. Its been about opening other peoples eyes to common mistakes that creep up on you. They creep up on 90+% of businesses and thats why they fail.

I choose not to use credit, though by now with my experience I could do so in a smart way. Its my personal choice and it my business. I just like it that way.

I could grow faster with it, but there is something about money in the bank that I like better.

My whole set of threads a few years ago talked about the problem of business slowing down and bills staying the same. Thats a scary feeling.

There are so many temptations I have now in my new business and new area.

I used to have a big shop and a big office when I was doing the amount of business I have now. I want one bad right now. I rent a small fenced lot and a shipping container. My office doubles as my laundry room in my house.

I had a new truck every year for a personal truck. Now I drive primarily my 04 ranger.
I had a shiny fleet of newer trucks. Now I run mid 90's trucks.

But you know what? I am growing like crazy, I am sucking work up left and right and have a reputation that Im proud of.

My suppliers who didnt know me last year and would only take cash, I can sign for anything I want and I pay my bills in a day or two like clockwork. They treat me like a rockstar when I go in there.

I run my older fleet of trucks and the other contractors laugh with their big shiny new trucks. Yet, I am the most hated person in the business here. Because they keep hearing "Sorry, we awarded the contract to Joe"

Everything is relative.

I do high end work, complicated work, work that takes a lot of selling and convincing to get. Then my crew rolls in in our 90's equipment. And does a job that is picture perfect.

I dont think the year of my trucks had a thing to do with it. Theyre all lettered, all the same color, and no panels falling off. And I paid less for all my trucks combined then I paid for one new one years ago.

So I dont think we need to talk extremes. Its not a 2012 vs a 1978 rust bucket.

But nobody is going to look at my 1999 chevy or 1994 box truck or any of the others and say I need to go with the guy with the 2012.

Im up 1000% in business this year over last year (my first in my new area)
I moved here with some old equipment, no business, and no money. And trashed credit.

My way isnt the only way. I just like it. When Im making a presentation, customers dont know I operate out of my laundry room and a gravel lot.

But the end result of their job is what they see.

Ive done it all before. Now I run my business hard core simple. Money in, money out, bank profit, make a wishlist and save for it. Buy it once and own it.

I can sleep at night. I can make payroll every week. I get bills in the mail, I dont have to wait for the next check or use my credit line. I write checks right at the post office and stick them back in the mail.

After going through what I went through. Im loving this.
Procut, another excellent post. If you ever get time you should publish a book on operating a successful small business.....THANKS
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