Register free!

The Green Industry's Resource Center



Closed Thread
 
Thread Tools   Display Modes
  #41  
Old 07-14-2013, 11:58 AM
94gt331's Avatar
94gt331 94gt331 is online now
LawnSite Bronze Member
 
Join Date: Jul 2011
Posts: 1,491
I carry a decent amount of debt, I have a small sized company with 4 fulltime employees we are going to hit $300,000 in sales this year. My debt isn't extremely high but it's higher than it should be. But I save alot of money as well. I like to keep alot of money in my savings acount even know I could pay off debt, messed up I know but it's my comfort zone. If I can aford to make those payments each month and still put money away in the bank. Truely what does it matter if you have debt or not. As long as your using that debt to make money and your profiting in the end that's all that matters. I grew my buisiness by taking risks. And it's paying off. Don't be scared of alittle debt. Just be responsible about it, that's what seperates the succesful and the rest. If you are worried about buying a $9,000 mower on a finance plan you don't have enough work to buy it anyway. You can get a new mower for $300 a month think how much you can make off that mower if your mowing 70 yards a week. Or would you rather be the guy with the old beat up mower constantly fixing it costing you more than it's worth because your afraid of taking a loan out for a mower.
  #42  
Old 07-14-2013, 12:17 PM
larryinalabama larryinalabama is online now
LawnSite Fanatic
 
Join Date: Jan 2008
Location: Ragland Al
Posts: 11,108
Ive alaways wondered why a company that has been in business several years cant afford to buy a lawnmower. If you have payroll and mower payments aren't you close to going out of business?
  #43  
Old 07-14-2013, 08:48 PM
vegandude's Avatar
vegandude vegandude is offline
LawnSite Senior Member
 
Join Date: May 2013
Location: eastern wa
Posts: 448
We have substantial savings, no payroll, no debt and yes I can go out and get whatever mower I need new, but I won't do that. I won't work with employees which means I am one serious injury away from hard times. I plan New equipment purchases and set aside a certain amount of gross every month that's saved for equip and maint. I don't like paying interest as that's just giving away my money. That's my comfort level. I just kinda think that the less you owe to somebody else, the less that can get messed up. I know that it isn't for everybody but oh well.
  #44  
Old 07-14-2013, 09:03 PM
94gt331's Avatar
94gt331 94gt331 is online now
LawnSite Bronze Member
 
Join Date: Jul 2011
Posts: 1,491
Quote:
Originally Posted by larryinalabama View Post
Ive alaways wondered why a company that has been in business several years cant afford to buy a lawnmower. If you have payroll and mower payments aren't you close to going out of business?
Just because you have payroll and mower payments, why would that mean they'd be going out of buisness? I know the mowing buisiness gets tight sometimes but a good operation should be able to swing a mower payment without going out of buisiness lol. I agree with your first sentence also
  #45  
Old 07-14-2013, 09:08 PM
JBNC JBNC is offline
LawnSite Member
 
Join Date: Apr 2010
Posts: 166
Quote:
Originally Posted by RSK Property Maintenance View Post
here's a question for you guys, is it a good idea to have money saved up for an emergency while in debt, or would it be better to take that money saved up and pay a credit card completely off and use that if an emergency occurs before that original money lets say its 2000 dollars is saved back up which would take about 30 days for me to save. then take the money i was paying on that credit and snow ball it with the money i'm paying on my last credit card and pay that one off, then work on the two trailers and be debt free by winter or just keep "saving money" even though with the interest i would be paying i'm not really saving much probably.

Since you mentioned Dave Ramsey it seems like you like his way of doing things. I'm a big fan of his. His baby steps for personal finance can translate into business pretty easily. The first thing I would do is save a little "emergency fund" (he recommends 1k, I would maybe save a little more for a business). After you have probably 2-3k in the bank w/ easy access I would start paying off the debt in the way you mentioned, smallest to largest. After your debt free save up a bigger emergency fund, and start sinking funds for equipment & trucks. The reasoning for saving up a few thousand to start off with is to put a buffer between you and life, it will fix a mower or pay for a broken window so that you don't have to go into debt to fix small issues that come up.
  #46  
Old 07-14-2013, 09:15 PM
larryinalabama larryinalabama is online now
LawnSite Fanatic
 
Join Date: Jan 2008
Location: Ragland Al
Posts: 11,108
Quote:
Originally Posted by 94gt331 View Post
Just because you have payroll and mower payments, why would that mean they'd be going out of buisness? I know the mowing buisiness gets tight sometimes but a good operation should be able to swing a mower payment without going out of buisiness lol. I agree with your first sentence also
Numbers on paper and real life are almost never the same.

Having debt increases your RISK, its that simple. A good mowing operation should be able to pay for a lawn mower, other wise someone isn't making very much money.
  #47  
Old 07-14-2013, 10:52 PM
RWI RWI is offline
Banned
 
Join Date: May 2013
Location: GA
Posts: 125
Quote:
Originally Posted by vegandude View Post
We have substantial savings, no payroll, no debt and yes I can go out and get whatever mower I need new, but I won't do that. I won't work with employees which means I am one serious injury away from hard times. I plan New equipment purchases and set aside a certain amount of gross every month that's saved for equip and maint. I don't like paying interest as that's just giving away my money. That's my comfort level. I just kinda think that the less you owe to somebody else, the less that can get messed up. I know that it isn't for everybody but oh well.
You need to talk to a good insurance agency and get workman's comp.
  #48  
Old 07-14-2013, 10:53 PM
RWI RWI is offline
Banned
 
Join Date: May 2013
Location: GA
Posts: 125
Quote:
Originally Posted by 94gt331 View Post
Just because you have payroll and mower payments, why would that mean they'd be going out of buisness? I know the mowing buisiness gets tight sometimes but a good operation should be able to swing a mower payment without going out of buisiness lol. I agree with your first sentence also
A "good mowing company" pays cash for mowers. I spent 20k in mowers last year and 12k in mowers this year... cash.
  #49  
Old 07-14-2013, 10:56 PM
RWI RWI is offline
Banned
 
Join Date: May 2013
Location: GA
Posts: 125
Quote:
Originally Posted by RSK Property Maintenance View Post
here's a question for you guys, is it a good idea to have money saved up for an emergency while in debt, or would it be better to take that money saved up and pay a credit card completely off and use that if an emergency occurs before that original money lets say its 2000 dollars is saved back up which would take about 30 days for me to save. then take the money i was paying on that credit and snow ball it with the money i'm paying on my last credit card and pay that one off, then work on the two trailers and be debt free by winter or just keep "saving money" even though with the interest i would be paying i'm not really saving much probably.
If you don't have half your "gross sales" in a bank account... you are not going to be around long.
  #50  
Old 07-14-2013, 11:05 PM
Efficiency's Avatar
Efficiency Efficiency is offline
LawnSite Bronze Member
 
Join Date: Apr 2011
Location: zone 6
Posts: 1,098
Quote:
Originally Posted by RWI View Post
If you don't have half your "gross sales" in a bank account... you are not going to be around long.
What? You have got to be kidding.
Closed Thread

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump





Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Copyright ©1998 - 2012, LawnSite.comô - Moose River Media
All times are GMT -4. The time now is 12:25 AM.

Page generated in 0.08124 seconds with 8 queries