1. Missed the live Ask the Expert event?
    Catch up on the conversation with Ken Hutcheson, President of U.S. Lawns, in the Franchising forum.

    Dismiss Notice

Debt Free business

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

  1. muddywater

    muddywater LawnSite Bronze Member
    Messages: 1,813

    Fleet pricing is a joke. I checked into it when I tried to buy 3 new tigers, and it really only saves you 500-1000 off of the average price. There is no difference between a mower with 100 hours and a new one... except several thousand dollars.

    So you can buy a work truck for 30k(would have to be a gas engine with work trim package), use it for landscaping for 4 years, and then sell it for 25k? I don't think this is possible. I don't see many 4 year old work truck used in the landscaping industry selling for 25k with 80k miles.

    I understand financing when you get started, but I consider it a luxury NOT having to finance anything.
     
  2. muddywater

    muddywater LawnSite Bronze Member
    Messages: 1,813

    It is such a small percentage you make doing it your way... it just seems stupid if you have the money. I can pay cash and literally save all the money you would make in interest by getting a discounted price for cash.

    So all your trucks and mowers are financed?
     
  3. living Green Property

    living Green Property LawnSite Member
    from PA Erie
    Messages: 68

    Haha no not all of our trucks are financed we have a lot paid for. I am not saying we don’t pay cash for stuff but but if I can get cheap interest I will loan it. And if you like paying cash for stuff and you are small enough to do it hey go for it I don’t care. But as you grow you will see the major advantage of loaning some money.
     
  4. living Green Property

    living Green Property LawnSite Member
    from PA Erie
    Messages: 68

    Yes it would be a small percentage if were just talking $1000. But if you are Brickman buying 1.5 million dollar’s worth of equipment each year ask them how loaning helps them. Don’t forget Brickman loaned almost a billion dollars and they will come to your town and low ball the crap out of you and still make 40% profit. And yes we by Chevrolet 2500 some 4 wheel some 2 wheel. And I can easily no problem sell them for $25,000 I just turned over 2 last month. As long as you keep them looking nice and a lot of times I’ll take them to the body shop and have them repainted or touched up. I don’t know why anyone would pay that much for them but people do.lol and like I said everyone has a different business model if you like paying cash go for it.
     
  5. MR-G

    MR-G LawnSite Senior Member
    Messages: 479

    Our business is debt free...has been for past 4 yrs....(in biz 25yrs) its a great feeling to be debt free...btw all equipment is turned over frequently...mowers every 2-3 yrs...handhelds every 1-2....trucks are all 10-12 yrs old and look and run like new...i like buying an old beater and restoring it top to bottom...just finishing a 1991 chevy as i type...my personal finances arent as good..lol....but wife was a stay at home mom for last 10 yrs and was worth every dollar of debt we incurred as both our kids are straight a students and have had a great childhood..lots of fun times they will always remember...now, my wife and i will work on paying down the debt from those years..should only take 3-4 yrs..and again worth every dollar we spent seeing the kids enjoy their young years..but business is debt free.
     
    Last edited: Feb 20, 2012
  6. muddywater

    muddywater LawnSite Bronze Member
    Messages: 1,813

    No I really don't see any advantages of loaning money as I grow. I have several crews now, and we make money and save money. Why loan the money if I have plenty of money in the bank? It just doesn't make sense to me.
     
  7. muddywater

    muddywater LawnSite Bronze Member
    Messages: 1,813

    Where did you get the info on brickman? 40% profit margin? Alot of large companies pay cash for everything. There is no reason to incur interest if you have the cash.

    I am very interested in your truck plan. I would like to understand more how you can buy a 30k work truck, use it for 4 years, put 80k miles on it, and sell it for 25k. Do you trade it in on the new truck? I don't see too many 08 model 2500 2wd with 80k bringing any where close to 25k.

    I am friends with a gmc dealer and I considered buying a new denali for my wife. If I paid cash. I think it was 54,000, I could trade it in every 6 months and pay $4000 every trade and basically have her driving a new car all the time. But this only works with certain models, like a denali that holds its value really well.
     
  8. living Green Property

    living Green Property LawnSite Member
    from PA Erie
    Messages: 68


    Haha I worked at a large accounting firm in Ohio before I did this and we did a lot with large national contractors so I know a lot of inside details about how these companies’s work. And as far as Brickman I am just going to leave it at I dated a district manager’s daughter and he liked to talk. lol he said and this is a quote “ I read on those lawn sites all the time guys talking about how a big company is lucky to operate at 20% profit hell last year in my district ran 38% profit” then he took another sip of his beer.lol

    In 2005 my first year I bought 2 new Chevy 2500 for $29,890 each both were 4 wheel drive standard cab base models. I sold them in 2010 for the one for $18,990 with 76,000 the other for $21,345 with 82,000 miles (I did have a $2600 easy dumper in this one.) I just looked at the receipts.
    I do understand the economy tanked and used cars spiked I did get lucky And there were some inflation problems. But still that’s really good it was hardly worth me buying used. I was at the dealer to day actually and the 2500s I’m running are running about $34,000 with being set up for a plow. And im seeing 2008 models for about $23,000 on cars.com so I’m really not that far off.
     
  9. muddywater

    muddywater LawnSite Bronze Member
    Messages: 1,813

    Actually, you can find some of their numbers on the internet. They are running no where close to a 40% profit margin. I was hoping you had a link to back that up.

    Single cab gas work trucks used for landscaping for 5 years are usually damn near worthless. Hard for me to believe you got 20k a piece for them.

    My numbers come to after taxes on a new one, I would imagine your up near 35-38k now. And sell them for 15k after 4 years of landscaping. So it costing alot more than a grand a year for a new truck. It is a 20k depreciation over 4 years.
     
  10. whiffyspark

    whiffyspark LawnSite Fanatic
    Messages: 6,269

    Posted via Mobile Device
     

Share This Page