Debt Free business

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

  1. clydebusa

    clydebusa LawnSite Bronze Member
    Posts: 1,660

    To each his own. Made up my mind in 2009 to be debt free. Got rid of the trucks I was making payments on and bought only trucks and equipment I can pay cash for. Since then the bottom line is really good and in this bad economy times that is a plus. Basically I just have the insurance to deal with. So if the equipment sets for a month no big deal. When you have debt you can't say that. I do agree that if you have the money and decide to do the zero % for xx months then that is okay. But the loan company is banking on you will be late and have to pay the complete loan with interest. But please if the ones that want the new equipment buy them, if everyone had my and other ideas we wouldn't have equipment to buy!:drinkup:
     
  2. 32vld

    32vld LawnSite Gold Member
    Posts: 3,984

    What you do works because you have the cash flow to pay the CC off in 30 days. Because the way you use credit works does not mena the use of credit is always the right way to go.

    Most do not have the cash flow. Cash flow problems are why most new businesses go down.

    And you are wrong there have been companies that have grown large without using credit.

    Not anti credit. Against using credit poorly.
     
  3. JimMarshall

    JimMarshall LawnSite Senior Member
    from NW PA
    Posts: 305

    Of course, my operation is probably a bit bigger than most here, but if they are offering 0%, I see no reason not to finance. That money makes me a lot more in interest sitting in my bank account than it does sitting in the dealers.
     
  4. muddywater

    muddywater LawnSite Bronze Member
    Posts: 1,813

    Your interest is already built into the purchase price, so you arent saving anything. And money markets only pay 1%, so the advantage is negligible.

    I am a smaller operation(alittle over 1 mil in sales), but i grew with no debt and if i needed to start 3 more crews i could do it without a loan.
    Posted via Mobile Device
     
  5. weeze

    weeze LawnSite Fanatic
    Posts: 8,492

    that's not a small company by any means. :laugh:

    i make 50k a year gross or less.
     
  6. zackvbra

    zackvbra LawnSite Senior Member
    Posts: 554

    What I ask you sir is what would you call a big operation??:laugh:
     
  7. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

    I agree! I made a broad statement, I'm not ignorant to the fact that there are people out there with a ton of cash sitting in the bank, but the avg American has less than 30K in the bank, there are always exceptions. if your sitting on a ton of cash your an exception to the rule. I agree! cash is king, but then you have to recover that cash, how long does that take? and then if something does go wrong your just out a bunch of cash. If I have to give back a financed mower I'm only out the payments I made, I've never had this happen and don't expect it to, but I'm just sayin. I could pay off everything I have financed right now, I've got my purchases spread out so that every year something gets paid off, as well as adding business the bottom line looks better and better every year, I kinda think that's how it's supposed to be.
     
  8. precisionlawnandlandscape

    precisionlawnandlandscape LawnSite Member
    Posts: 19

     
  9. cpllawncare

    cpllawncare LawnSite Silver Member
    Posts: 2,659

     
  10. 205mx

    205mx LawnSite Silver Member
    Posts: 2,346

     

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