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  #21  
Old 06-23-2013, 06:04 PM
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tonygreek tonygreek is offline
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Originally Posted by RWI View Post
I haven't financed anything in the last 10 years. I am not really interested in "gaining clients", I am interested in gaining the right clients. And I spend 7-8k a month in advertising out of cash flow. I did 1.1 million last year, and had another business I own do 1.7 million. So even though its just my opinion and not necessarily the only way... it has worked very well for me. And I don't owe anybody sh!t.
Exactly. It's what works best for your business, situation, and strategy.

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Originally Posted by RWI View Post
Why would you finance anything if you have money in the bank? A business is pretty much the only thing you can get a 20%+ return on these days.
Take Efficiency's point about financing equipment vs. the inability to finance customer acquisition. If you have $20,000 in cash, and you can use that to acquire customers, and you finance your equipment, you only need to look at your customer revenue scaling as they begin to add more value than the interest rate you are paying. It's a simple arbitrage play. It's the same reason why I wouldn't think twice about financing a car at 1.9% when I could just as easily write a check. I'll make more having my money work for me in other ways than just handing a lump sum over to a retailer. For me, I have the confidence in my business to know that I'd rather use other people's money when I deem appropriate.

(side story: I recently bought a new car with 0% financing for 48 months. The sales guy said, "Great! How much would you like to put down?". He seemed genuinely confused when I said, "Really?".)
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Last edited by tonygreek; 06-23-2013 at 06:09 PM.
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  #22  
Old 06-23-2013, 06:27 PM
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wildstarblazer wildstarblazer is offline
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Originally Posted by tonygreek View Post
It seems you're taking every dollar made and, beyond expenses, you and your wife are treating it as your personal income. You're not going to grow a business by doing this. In fact, you probably need to recognize that you are self-employed, and not actually a business owner. There's nothing wrong with this approach, but you need to understand you will likely always have the shiny equipment envy you seem to have.

You would be hard-pressed to find any description of the term "business" that does not include a reference to profit-seeking. Profit is the difference between expenses and what's taken in. That profit can either be rolled back in to the company ( usually to fuel growth or purchases), taken out and distributed to the shareholders/owner, or some combination of the two. It seems you're going with the full distribution to yourself, while ignoring the future potential of your ideal business.

This leads to the question: What do Mr. and Mrs. Wild Starblazer want out of this deal? Do you want to be self-employed, or do you want to build a business?
Your points are taken. Mr. wants a business. Mrs. doesn't want to do what it takes. Never on the same page. That is a big part of my problem.
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  #23  
Old 06-23-2013, 06:31 PM
RWI RWI is offline
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Originally Posted by tonygreek View Post
Exactly. It's what works best for your business, situation, and strategy.


Take Efficiency's point about financing equipment vs. the inability to finance customer acquisition. If you have $20,000 in cash, and you can use that to acquire customers, and you finance your equipment, you only need to look at your customer revenue scaling as they begin to add more value than the interest rate you are paying. It's a simple arbitrage play. It's the same reason why I wouldn't think twice about financing a car at 1.9% when I could just as easily write a check. I'll make more having my money work for me in other ways than just handing a lump sum over to a retailer. For me, I have the confidence in my business to know that I'd rather use other people's money when I deem appropriate.

(side story: I recently bought a new car with 0% financing for 48 months. The sales guy said, "Great! How much would you like to put down?". He seemed genuinely confused when I said, "Really?".)
Financing doesn't really have any net benefit to me because I have money. I am looking for ways to make money work for me, and paying interest is stupid when you have capital.

And 0% is a freaking joke, there is no such thing. One of my good friends owns a GMC dealership... if you do 0% you pay more for the car. Plain and simple.
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  #24  
Old 06-23-2013, 07:21 PM
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tonygreek tonygreek is offline
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Financing doesn't really have any net benefit to me because I have money. I am looking for ways to make money work for me, and paying interest is stupid when you have capital.
Not everyone is in your situation. Not everyone in your situation shares your thought process. You said, "financing is for poor people". That's simply just wrong on many levels, let alone one.
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Originally Posted by RWI
And 0% is a freaking joke, there is no such thing. One of my good friends owns a GMC dealership... if you do 0% you pay more for the car. Plain and simple.
This is now twice that you're adamant when you shouldn't be. I'm not going to play the "I know a [whoever], therefore..." game. Suffice it to say, I have a pretty solid hand to play with, and it's an argumentative tactic that's simply lost on me. You seem to think that a 0% finance is a specific program that is adhered to. That line of thinking is exactly what less than reputable dealers would prefer you to think. I negotiated my car to the price I was willing to pay and then financed at 0%.

I think we've veered a bit off topic on this one, so I'll disengage.
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  #25  
Old 06-23-2013, 08:00 PM
RWI RWI is offline
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Originally Posted by tonygreek View Post
Not everyone is in your situation. Not everyone in your situation shares your thought process. You said, "financing is for poor people". That's simply just wrong on many levels, let alone one.

This is now twice that you're adamant when you shouldn't be. I'm not going to play the "I know a [whoever], therefore..." game. Suffice it to say, I have a pretty solid hand to play with, and it's an argumentative tactic that's simply lost on me. You seem to think that a 0% finance is a specific program that is adhered to. That line of thinking is exactly what less than reputable dealers would prefer you to think. I negotiated my car to the price I was willing to pay and then financed at 0%.

I think we've veered a bit off topic on this one, so I'll disengage.
Hey Tony, I know you are smart mothertrucker, in fact I would love for you to evaluate my website and how it is set up for SEO(for a fee of course). PM me if you are interested.

I will back down on the financing, but for the most part poor people are the people that finance. I have really enjoyed "not financing"! When I was 20 years old, the bank told me they would not finance a 20k skid steer for me, ever since then I have decided to be my own bank. And the more money you have the more risk you can take, the more you can have in inventory, you can pay your subs and suppliers immediately with no term = advantage on pricing and service.

On the car thing, when I was thinking about buying a 60k denali for cash or 0% for my wife. He was selling the car to me for cost plus a $500 doc fee(doc fee is the owner's salary). There was a difference in thousands between cash price and 0%. There is no such thing as a free lunch and there is no such thing as 0% financing.
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  #26  
Old 06-23-2013, 08:06 PM
grassmasterswilson grassmasterswilson is online now
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Seems you have a good client base. Have you considered up selling additional or new services?

What shape is your equipment in? You should only buy what you need and use. If you only have 1 large commercial account there is no need to take 3 mowers. Just get buy and re-evaluate after a few weeks or months.

Take a look at how you are quoting... Figure overhead(labor, gas, insurance,etc) + replacement cost of all equipment + profit. That should allow you some cushion to save for new equipment and advertising. If you figure is way then you either aren't doing it right or you are spending too much money at home.

Stick to advertising and building a client base before purchasing equipment. Use common sense. If you are a 2 man crew with 1 ztr then you may need to say no to a 5 acre commercial property.

I did a few ads and mailers this year and have gone from me + a part time guy to now it being me + a ft guy and ft seasonal guy. I've been fortunate and marketing has payed off.
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  #27  
Old 06-23-2013, 08:12 PM
grassmasterswilson grassmasterswilson is online now
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I agree on trying not to finance but some aren't as well off in the cash on hand department. I have been able to pay cash on all my mowers, but not on my truck. I chose to finance it for 5 years with a low monthly payment so that I could take other money and put into advertisement and growth. It worked for me even though I paid more in the long run, but I was able to pay it off early.

As for negotiating a car deal. To me it sounds as if you are choosing between two price choices.... U pay x for a cash deal and x if u finance. Dealing with friends is tough when you don't want to stick it to them but I've always negotiated a price before ever talking financing. If they know you are financing the price will always be higher and they get you thinking about the payment and how low it is.

Just food for thought.


Quote:
Originally Posted by RWI View Post
Hey Tony, I know you are smart mothertrucker, in fact I would love for you to evaluate my website and how it is set up for SEO(for a fee of course). PM me if you are interested.

I will back down on the financing, but for the most part poor people are the people that finance. I have really enjoyed "not financing"! When I was 20 years old, the bank told me they would not finance a 20k skid steer for me, ever since then I have decided to be my own bank. And the more money you have the more risk you can take, the more you can have in inventory, you can pay your subs and suppliers immediately with no term = advantage on pricing and service.

On the car thing, when I was thinking about buying a 60k denali for cash or 0% for my wife. He was selling the car to me for cost plus a $500 doc fee(doc fee is the owner's salary). There was a difference in thousands between cash price and 0%. There is no such thing as a free lunch and there is no such thing as 0% financing.
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  #28  
Old 06-23-2013, 08:17 PM
RWI RWI is offline
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Quote:
Originally Posted by grassmasterswilson View Post
I agree on trying not to finance but some aren't as well off in the cash on hand department. I have been able to pay cash on all my mowers, but not on my truck. I chose to finance it for 5 years with a low monthly payment so that I could take other money and put into advertisement and growth. It worked for me even though I paid more in the long run, but I was able to pay it off early.

As for negotiating a car deal. To me it sounds as if you are choosing between two price choices.... U pay x for a cash deal and x if u finance. Dealing with friends is tough when you don't want to stick it to them but I've always negotiated a price before ever talking financing. If they know you are financing the price will always be higher and they get you thinking about the payment and how low it is.

Just food for thought.
Uh no, my friend is worth 30 million dollars, he was literally selling the car at dealer cost plus a doc fee... there was no negotiating. Financing was a few thousand higher b/c the finance company charges their percentage on the front end.
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  #29  
Old 06-23-2013, 08:27 PM
larryinalabama larryinalabama is offline
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Originally Posted by RWI View Post
I have 200k worth of equipment and trucks, all of which I bought used and paid cash for. I learned a long time ago my time is worth more than $10-15 an hour. You just cannot get rich holding a weedeater, you have to figure out how to delegate, be cost efficient, manage your money, how to hire and keep good employees, and price jobs correctly.

And if you really want to get rich, you need to have a desire to be the best.

And financing is for poor people. And for those that say it isn't please post a pic of your bank statement.
I like your style.

If I had a truck payment and a ZTR payment I would have never survived my first couple of years.

To me a lawn mower payment doesnt even sound right.

I see fellers cutting grass using 60k trucks, its completely unnessary and a waste of money.

To the OP, Im sure the feller out there running a crew with truck and mower payments would gladly go back to the days of sulkeys and old trucks being SOLO.

Shiney stuff is nice,,,,financial security is a whole lot better.
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  #30  
Old 06-23-2013, 08:36 PM
RWI RWI is offline
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I am very similar to a vulcher. I smelled a company dying a few years ago. Went in and asked if they had any trucks for sale. Ended up buying a 2001 Isuzu NPR diesel box truck with 90k miles for $2200. The wrap I did on the box cost more money that the actual truck did. Ally trucks are wrapped(I have 25k in vinyl invested on my trucks). But the truck is still running today. My Hispanics painted the cab our company color, I spent $3000 wrapping the box, we built the dovetail ourselves(my welder pissed me off so I bought a Miller 250 and taught my guys how to weld), so I have $7000 in a purpose built work truck that will run another 200k miles while these other dumbass landscapers are pulling these crappy utility trailers around in their 60k cowboy Cadillac. And if you work in this industry... that cowboy Cadillac still smells like a cesspool just like my Isuzu's do!
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