Debt Free business

Discussion in 'Starting a Lawn Care Business' started by Hoss4x4, Sep 18, 2011.

  1. muddywater

    muddywater LawnSite Bronze Member
    Posts: 1,813

    Fleet pricing is a joke. I checked into it when I tried to buy 3 new tigers, and it really only saves you 500-1000 off of the average price. There is no difference between a mower with 100 hours and a new one... except several thousand dollars.

    So you can buy a work truck for 30k(would have to be a gas engine with work trim package), use it for landscaping for 4 years, and then sell it for 25k? I don't think this is possible. I don't see many 4 year old work truck used in the landscaping industry selling for 25k with 80k miles.

    I understand financing when you get started, but I consider it a luxury NOT having to finance anything.
     
  2. muddywater

    muddywater LawnSite Bronze Member
    Posts: 1,813

    It is such a small percentage you make doing it your way... it just seems stupid if you have the money. I can pay cash and literally save all the money you would make in interest by getting a discounted price for cash.

    So all your trucks and mowers are financed?
     
  3. living Green Property

    living Green Property LawnSite Member
    from PA Erie
    Posts: 68

    Haha no not all of our trucks are financed we have a lot paid for. I am not saying we don’t pay cash for stuff but but if I can get cheap interest I will loan it. And if you like paying cash for stuff and you are small enough to do it hey go for it I don’t care. But as you grow you will see the major advantage of loaning some money.
     
  4. living Green Property

    living Green Property LawnSite Member
    from PA Erie
    Posts: 68

    Yes it would be a small percentage if were just talking $1000. But if you are Brickman buying 1.5 million dollar’s worth of equipment each year ask them how loaning helps them. Don’t forget Brickman loaned almost a billion dollars and they will come to your town and low ball the crap out of you and still make 40% profit. And yes we by Chevrolet 2500 some 4 wheel some 2 wheel. And I can easily no problem sell them for $25,000 I just turned over 2 last month. As long as you keep them looking nice and a lot of times I’ll take them to the body shop and have them repainted or touched up. I don’t know why anyone would pay that much for them but people do.lol and like I said everyone has a different business model if you like paying cash go for it.
     
  5. MR-G

    MR-G LawnSite Senior Member
    Posts: 479

    Our business is debt free...has been for past 4 yrs....(in biz 25yrs) its a great feeling to be debt free...btw all equipment is turned over frequently...mowers every 2-3 yrs...handhelds every 1-2....trucks are all 10-12 yrs old and look and run like new...i like buying an old beater and restoring it top to bottom...just finishing a 1991 chevy as i type...my personal finances arent as good..lol....but wife was a stay at home mom for last 10 yrs and was worth every dollar of debt we incurred as both our kids are straight a students and have had a great childhood..lots of fun times they will always remember...now, my wife and i will work on paying down the debt from those years..should only take 3-4 yrs..and again worth every dollar we spent seeing the kids enjoy their young years..but business is debt free.
     
    Last edited: Feb 20, 2012
  6. muddywater

    muddywater LawnSite Bronze Member
    Posts: 1,813

    No I really don't see any advantages of loaning money as I grow. I have several crews now, and we make money and save money. Why loan the money if I have plenty of money in the bank? It just doesn't make sense to me.
     
  7. muddywater

    muddywater LawnSite Bronze Member
    Posts: 1,813

    Where did you get the info on brickman? 40% profit margin? Alot of large companies pay cash for everything. There is no reason to incur interest if you have the cash.

    I am very interested in your truck plan. I would like to understand more how you can buy a 30k work truck, use it for 4 years, put 80k miles on it, and sell it for 25k. Do you trade it in on the new truck? I don't see too many 08 model 2500 2wd with 80k bringing any where close to 25k.

    I am friends with a gmc dealer and I considered buying a new denali for my wife. If I paid cash. I think it was 54,000, I could trade it in every 6 months and pay $4000 every trade and basically have her driving a new car all the time. But this only works with certain models, like a denali that holds its value really well.
     
  8. living Green Property

    living Green Property LawnSite Member
    from PA Erie
    Posts: 68


    Haha I worked at a large accounting firm in Ohio before I did this and we did a lot with large national contractors so I know a lot of inside details about how these companies’s work. And as far as Brickman I am just going to leave it at I dated a district manager’s daughter and he liked to talk. lol he said and this is a quote “ I read on those lawn sites all the time guys talking about how a big company is lucky to operate at 20% profit hell last year in my district ran 38% profit” then he took another sip of his beer.lol

    In 2005 my first year I bought 2 new Chevy 2500 for $29,890 each both were 4 wheel drive standard cab base models. I sold them in 2010 for the one for $18,990 with 76,000 the other for $21,345 with 82,000 miles (I did have a $2600 easy dumper in this one.) I just looked at the receipts.
    I do understand the economy tanked and used cars spiked I did get lucky And there were some inflation problems. But still that’s really good it was hardly worth me buying used. I was at the dealer to day actually and the 2500s I’m running are running about $34,000 with being set up for a plow. And im seeing 2008 models for about $23,000 on cars.com so I’m really not that far off.
     
  9. muddywater

    muddywater LawnSite Bronze Member
    Posts: 1,813

    Actually, you can find some of their numbers on the internet. They are running no where close to a 40% profit margin. I was hoping you had a link to back that up.

    Single cab gas work trucks used for landscaping for 5 years are usually damn near worthless. Hard for me to believe you got 20k a piece for them.

    My numbers come to after taxes on a new one, I would imagine your up near 35-38k now. And sell them for 15k after 4 years of landscaping. So it costing alot more than a grand a year for a new truck. It is a 20k depreciation over 4 years.
     
  10. whiffyspark

    whiffyspark LawnSite Fanatic
    Posts: 6,099

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