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Discussion in 'Business Operations' started by CJIII, Oct 26, 2002.
hey guys I got a question. is wise to get a business loan?
I have never gotten a loan or have never needed one. Start out small and grow. I won't depend upon what the weather is like or what the customers are like one day they are here the next they are gone.
and how much.
Is it to expand your current business? Is it under $5K ? Is it ti start a new business?
If it was for a start-up, I would try not to. It can be done succesfully, don't get me wrong, I would just choose to have money set aside to start.
The reason I say that is so there's no pressure to take on cheap work just to "Pay the bills". Does that make sense?
Our first 15 years, we operated without any type of business financing (other than vehicle loans).
We then borrowed some money for a fixed term, and when that was paid back - we didn't finance anything for another 5 or 6 years.
Now we have a CFO to run our finances and we DO have business financing - but the decimal point for our business is in a much different location too....
At some point, financing is a good thing - although it must be viewed as "managed debt". Larger companies (like, multi millions in revenues) require some debt to be solvent. We actually got to a point where our debt to equity ratio was SO low, that the bank and our outside accountant had some difficulty with it as it began to adversly affect cash flow.
If you're small - do as much as you can without debt - IMO.
I just wondering if I start a lawn service would it be a wise idea.
Save up the $3000 it takes to start, and plow your profits back in to the company.
If you can't save up any money, go back to bed.