You paid cash for everything when you started,so where you in debt?

Discussion in 'Business Operations' started by grandview (2006), Nov 20, 2012.

  1. CowboysLawnCareDelaware

    CowboysLawnCareDelaware LawnSite Senior Member
    from DE
    Posts: 555

    I agree that you should start off with used equipment, but not junk. You shouldn't need a mechanic to to do the work for you. If you can't change your own oil, filters, spark plugs, and at least remove your blades than you are in the wrong business. (I've got nothing against people having suppliers sharpen their blades for them, I do my own).

    -Michael
     
  2. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,536

    Most companies reach a point where they can't grow without a line of credit. If you think you can save up cash on hand you will reach that plateau. Part of the problem in todays economy. Without banks extending credit to small business they are doomed to stagnate. This is why new guys will do well to take some actual business classes. You don't want to do this part OJT.
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  3. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,459

    Ill never figure why everyone thinks you have to borrow money to have new and realiable equiptment.

    Its simple math if it takes 25k to add a nother crew, a business should eaisly be able to hold 12500$ and add a new crew every 2 years.
    If a mower cost 10k new and you use it 2 years its still worth 5k, so you get new one thats only 2500$ per year.

    Truthfully to build "wealth" you need to get rid of debt, not take on more.
     
  4. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,536

    I gotta disagree with that to a point. Idle cash on hand is not going to do me much good. Money is cheap for a business that deserves it. Savvy investments can reap returns several times what it costs to borrow it. Again these are not financial maneuvers for the uneducated, new or hand to mouth business.
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  5. MDLawn

    MDLawn LawnSite Bronze Member
    Posts: 1,284

    Absolutely agree!!!!
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  6. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,459

    Ive never been able to "outsmart" the banking and finincial system, its full of risk and alot of "CROOKS".

    Occaisonally Ill pick up some realestate that I need to borrow to secure the deal, but nothing that wont be reaid within a year, and I really dont like doing that.
     
  7. muddywater

    muddywater LawnSite Bronze Member
    Posts: 1,813

    What are you investing in? I have had trouble finding a good investment lately. Real estate, not sure i want to deal w tenants, banks interest is a joke, buying another business in this economy seems risky.

    I dont think a stereotype of plateauing is true. I know several large businesses w lines of credit extended that can barely make payroll.
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  8. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,536

    Several different business arms all related to real estate. It really is a good time. You have to know people in few fields to get the best deals. Some of the old standby stocks. Cat and BOA have been good when you know when to jump in and out. Trading software has helped immensley. I don't like brokers.
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    Last edited: Nov 23, 2012
  9. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,459

    In my opinion "day trading" is nuts, at least in Las Vegas you will have a little fun pissing money away.

    Realestate "groups, or exchanges" are a scam and you will loose all your money and be sued for more money later on.

    Its extremely risky do do some of these deals on credit.
     
  10. Patriot Services

    Patriot Services LawnSite Fanatic
    Posts: 12,536

    I don't do any of those three. Buying real estate these days means knowing who in the banking division has the authority to sell you a distressed property. Trading programs mean I don't have to watch the damn ticker all the time. I never said I borrow money to invest in the market. This is my life savings I'm working with.
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