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Debt Free business

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

  1. USA Lawn Care

    USA Lawn Care LawnSite Member
    Posts: 62

    yes....back to the original OP.....had to look back to see what we were actually trying to answer here :) "how many years and any tips?" was the question.....

    debt free 2 seasons.
    ran a lawn business 15 years ago (did it for 5 years full time).
    financed the crap out of everything because every dealer was willing to hand it over to me.
    2 trucks, 3 guys, lots of equipment, cutting about 120 yds a week back then.
    Got out for personal reasons....sold it all....
    Back in again, paid off my personal debt and decided to carry that to my own business again and simply be patient, patient, patient and grow slow and steady with continuous positive cash flow.
    Tip: patience, patience, patience.
    Tip: I thought I had to have debt to grow.........my business has no debt and it is growing nicely just like it did years ago.
  2. Appreciating something more has nothing to do with cash vs. Credit. I bought my 2008 wright stander brand new on a 1 yr. 0% interest. I paid each payment with my hard earned money and it was paid off in a year. I didn't have to fork over 5k up front for it. Emotions have nothing to do with financing.
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  3. MDLawn

    MDLawn LawnSite Bronze Member
    Posts: 1,284

    It took me 3 years (all part time) to pay for the following

    New Exmark 48" Turf Tracer (0% and no fees, paid off after 1 season)
    New Exmark 36" Belt Drive Metro (bought 2nd season 0% and no fees, paid off second season, sold 3 seasons after buying it for $300 less than I paid for it!!)
    6x12 Landscape Trailer (bought with cash, sold for $100 less than I paid for it!!)
    6x10 Dump Trailer
    7x14 Dump Trailer (Bought at end of 4th season, sold off 6x10, put that as down payment + cash from landscape trailer, 0% + $125 fee for the rest, paid off the following season)

    Small stuff such as hand helds, blower, chain saw, tiller, hand tools, and other misc equipment paid with money earned by business, not my income from my full time job. The mower and trailer that I sold for such little less than I paid for were because a friend of mine owns a business that sold this stuff and he gave me incredible deals on them. I also got in the 0% before they started charging those fees for the mowers.

    If I had done this full time, everything could have been paid off much quicker.

    - Get what you need not what everyone else has.

    I bought a dump trailer because after working for someone for 5 years I got sick of having to shovel stuff out of a truck. Plus I was able to do 2-4 small jobs in one day because I could fill it up with all the debris from each job, dump it, then get the materials I needed to finish all of them. Wasn't happening with a pick up truck. But I also had other means of purchasing (full time job)

    - If you do have financing put any extra money to pay that piece off rather than putting it in your pocket or into something not business related. Once it's paid off then fill your pocket!

    - I agree with the slow and steady. You'll get better customers that way rather than rapidly expanding then needing any work you can get.
    Last edited: Sep 21, 2011
  4. BPS##

    BPS## LawnSite Senior Member
    from WY
    Posts: 828

    Business debt......... $0.00

    Personal debt (house, wife's car) yes

    Cash is king!!!! I have a debit card for purchases.
    NO credit cards. I had to learn the very hard and very stressful way that credit cards are not for me.
  5. Hoss4x4

    Hoss4x4 LawnSite Member
    Posts: 8

    Not at all. Just chose to pay cash and have savings. The best of both worlds.
  6. USA Lawn Care

    USA Lawn Care LawnSite Member
    Posts: 62

    I would have to add that in no way am I putting down someone who's business runs using credit. And, by no means can I say that the temptation has not been there to go out and buy something on credit (which I would qualify for I might add...). I've simply chosen to take the risk factor out of my business and use only cash which forces me to save $ and actually think about what I am doing and think about the pricing a little more and think of all the options before I spend my hard earned cash. Is it easy? Nope. A lot of people think it's dumb to drain my account to purchase something. But I'm not draining anything. I've saved for what I wanted to buy and with no payments to make, the cash comes right back into my account very quickly. I could park my truck tomorrow and not cut another yard and not have any expenses to pay that actually force me to go out there and pay off equipment. Again, I'm truly not knocking anyone using credit.....that's not for me to judge. Most of the time, credit works and makes life more convenient. I simply am choosing to do things differently and all I can say is that I have no monetary stress with this business anymore and I am actually in complete control of what I do. And, yes, a debt free business seems wierd and unimaginable to a lot of people out there. Never bank on money that is not in your hand yet, COLLECT THAT MONEY AS QUICKLY AS YOU CAN, and operating 'in the black' is quite a fun way to run a business. It works and no one can tell me otherwise.
  7. txgrassguy

    txgrassguy LawnSite Gold Member
    Posts: 3,083

    I have only borrowed money for larger ticket items I really needed like a new truck and a shaping 4X4 tractor. All are paid off and have been for several years.

    One way to ensure you get maximum life out of your equipment is to shorten the maintenance interval for whatever you are operating. This includes cleaning the machines/equipment at least one time per week. Doesn't cost much and really adds life to the equipment. I still have a couple of machines well over 2,500 hrs and still running strong. Now they aren't first line use but make for valuable back ups.

    Regarding appearance, one sure way to separate your business from the low ball people out there is to have clean, rust and dent free, truck,trailer and equipment. The higher socio-economic demographic does take notice of a more professional appearing outfit. Do you really think a family that has spent hard earned money buying a large house and grounds wants Earl the cable guy in a beat up truck and cheap equipment seen around them? If you think No, you had better think again.

    Also, never underestimate uniformity. You don't have to dump tons of money into silk screening shirts. Buy in bulk from Costco good heavy weight T-shirts all in the same color, spend $60 a door for decent vinyl lettering for the truck and attach simple metal plates to your trailer (if it isn't enclosed) with the same logo/info. I cannot tell you how often I am stopped either at a light or while re-fueling by people in larger expensive vehicles wanting to speak with me - all because they noticed the uniformity and logo's and prefer having my rig verse an oil leaking Exxon special in front of their property.
  8. MDLawn

    MDLawn LawnSite Bronze Member
    Posts: 1,284

    I know that this subject you have started is a little off topic but I couldnt agree more with it. I think with opening this topic you just struck a match near gasoline, but whatever. The guy I worked for never had logo's or letting on vehicles but we had shirts and man his stuff (truck, trailer, equipment) was kept in great shape! The jobsite was always kept clean too. He got a lot of compliments on how neat and clean his stuff was. People were happy he had that so they didn't get a beat piece of junk sitting in front of their house. I think I had nice stuff and kept it clean too and got compliments for it also. No one every gave me the line "that must be expensive" or "you must be doing REALLY well for yourself". Why? Because they drive a Lexus, BMW, Mercedes, etc... Not to mention my trucks are used, but clean. If you service Joe Schmoe, he's going to be envious. Serve a wealthy client and they don't even notice what you have just how neat & clean it looks.

    I know even for myself, who is far from rich, I appreciate well taken care of stuff. I recently had a nice window done and the window company subbed out the trim work. I pulled in my driveway next to this beat pos dodge with so much garbage in the bed and stuffed in the cab. They did a just ok job with the trim but when I came home I wasn't sure if I was being robbed or guys doing work! Small things, like apperance, go a long way. You don't need new, just clean and well kept.
    Last edited: Sep 22, 2011
  9. stan the man

    stan the man LawnSite Senior Member
    from Maine
    Posts: 705

    15 years in business 10 years debt free. 4 houses debt free. all trucks and all equipment debt free
  10. lawnagent

    lawnagent LawnSite Senior Member
    Posts: 529

    I know for a fact that in the automotive industry, you pay more for a 0% finance vehicle than you do if you pay cash. Therefore its not really interest free if you pay more for it. Every time I ever figured it on anything else mowers, atv's it came out the same. Paying more principal for 0% than if you payed cash. You need someone besides yourself to ask a dealer their cash price. They are to smart to give one customer both parameters up front. You would figure it out.

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