How much debt is safe to carry?

Discussion in 'Business Operations' started by 32vld, Jul 5, 2013.

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  1. SRT8

    SRT8 LawnSite Bronze Member
    from CA
    Posts: 1,291

    I think he means for example if your a 3million dollar annual company you should have 1.5mill in the bank, not from one year but from prior years accumulated.
     
  2. RSK Property Maintenance

    RSK Property Maintenance LawnSite Bronze Member
    Posts: 1,486

    starting from the beginning? I just started my business, in my second year and i should have half my gross sales in the bank? on a better note I am making lots of connections with people power boating world, not talking little lake boats, either i'm talk 35-50' v bottom boats and 50' cats with 3000hp. which will help me grow my landscaping company because they all need landscape maintenance done, and they all know people who need landscape maintenance done.
     
  3. StrokerTurbo7.3

    StrokerTurbo7.3 LawnSite Member
    Posts: 150

    If this is true I'm doomed.
     
  4. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Posts: 2,716

    I'm pretty sure Brickman and Valley Crest don't have 400 mil sitting in a "rainy day" account.
     
  5. clydebusa

    clydebusa LawnSite Bronze Member
    Posts: 1,660

    That is what those type of loans are banking on!
     
  6. andyslawncare

    andyslawncare LawnSite Senior Member
    Posts: 812

    If you saved $600/month for 3 years you could have a fully outfitted second truck...I buy used with about 60k miles 2500 trucks for $10k--have 3 of them now and you're truck is probably more total money than all 3. NO debt is the best way to do things. I could close doors tomorrow and not owe any more than that week's payroll. I do at least 12k/month in maintenance and still wouldn't pay 600/month for a truck. Personally, 50% of my 25k credit card limit is 12.5k and I would frankly be embarrassed if that was ever reached--the card has had $0.00 balance for 2 years and things are much better that way. Instead of paying the credit bill, i'm paying the savings account.
     
  7. 94gt331

    94gt331 LawnSite Bronze Member
    Male
    Posts: 1,693

    Seems like you got a good thing rolling, keep up the good work!
     
  8. 94gt331

    94gt331 LawnSite Bronze Member
    Male
    Posts: 1,693

    You da man:waving:
     
  9. RWI

    RWI Banned
    from GA
    Posts: 125

    Is it really that bad of an idea to work toward?
     
  10. fastlane

    fastlane LawnSite Senior Member
    Posts: 347

    WOW! So for over 40 years I've been doing this wrong? I only keep 3 months of working capital (not gross) in the bank.
     
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