For the $2m+ guys - Truck purchasing

Discussion in 'Business Operations' started by BrendonTW, Aug 31, 2017.

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How do you buy?

  1. Finance New

    10 vote(s)
    50.0%
  2. Cash New

    2 vote(s)
    10.0%
  3. Finance 1-35k miles

    0 vote(s)
    0.0%
  4. Cash 1-35k miles

    1 vote(s)
    5.0%
  5. Finance 35k - 70k miles

    1 vote(s)
    5.0%
  6. Cash 35k - 70k miles

    2 vote(s)
    10.0%
  7. Finance 70k-100k miles

    0 vote(s)
    0.0%
  8. Cash 70k-100k miles

    1 vote(s)
    5.0%
  9. Finance 100k + miles

    0 vote(s)
    0.0%
  10. Cash 100k + miles

    3 vote(s)
    15.0%
  1. Efficiency

    Efficiency LawnSite Bronze Member
    from zone 6
    Messages: 1,738

    Hold on. Income statement is different than balance sheet. One is influenced by the other. But your quoted statement is just wrong.
     
  2. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,164

    depreciation is a real expense on my P&L.
     
    Mark Oomkes likes this.
  3. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 14,774

    I figured you were well over 5 mil based on your comments and what you purport yourself to be.

    Maybe it's because I'm not at $2M or $5M, but it seems at either one of these revenue marks, there would be an ops manager\fleet manager combo title instead of someone worth $250\hour (allegedly) surfing Craigslist and Classifieds for great deals.

    But if it's laziness, it would be wrong, wouldn't it? That's the way I would take it.

    I think standardization is important for any size company, and in many ways even more so for smaller companies. They (I) don't have the training resources to train employees on a multitude of different types of equipment, multiple backups or funds to stock a brazillion parts for 15 different kinds of mowers.

    And while my time isn't worth $250\hour (allegedly), I sure don't want to be wasting time keeping track of which oil filters I have to have on hand for 15 different brands of mowers with 13 different engines.

    Just my lazy thoughts.
     
  4. La Chandler

    La Chandler LawnSite Member
    Messages: 51

    That too. My comment was a positive one, referring to individuals who buy equipment they either don't need or liquidate.
     
  5. landscape2014

    landscape2014 LawnSite Senior Member
    Messages: 361

    I think my statement is right as well as Smomah. The P & L will not show an asset purchase like a truck. It will transfer from cash to asset on your balance sheet. The straight line depreciation will show up on your P & L to account for overhead recovery and to account for the actual cost of that asset depreciating.

    That is where the way I do things gets interesting. I buy things for less than they are actually worth, so they influence my straightline depreciation making that number much lower on my P & L. For instance, I have a truck that I bought for $2000 10 years ago that should have been $15,000. It is still on the road today and worth probably $7,000. My depreciation is actual positive on it. The only catch is in overhead recovery.... I probably won't find another deal like that today so I am not accounting for a replacement cost of $10,000 - $15,000 to buy another one.

    Also, when you do it this way... your assets are actually worth pretty close to what you paid making your investment not only pay for itself faster but increase the value of your company.
     
  6. landscape2014

    landscape2014 LawnSite Senior Member
    Messages: 361

    You do have a point about standardization, but you are going to end up with an excel spreadsheet managing oil filters any way you cut it. It is nice to have one brand mower and only 2 deck sizes to keep stock of blades.

    I enjoy finding deals more than I do relaxing. I found the deal on the Scag while poolside out of town because I am obsessive about keeping cost down and I love negotiating and finding great deals. Negotiating is an art form that I enjoy sharpening and getting tougher and better and better.

    My statement was strong and brash. I should have withheld it, but I am used to hanging around sharks that are killers... it wasn't my intention to insult you nor was it directed at you. I am sorry
     
    hort101 likes this.
  7. landscape2014

    landscape2014 LawnSite Senior Member
    Messages: 361

    Gotcha... sorry I misread your initial comment.
     
  8. landscape2014

    landscape2014 LawnSite Senior Member
    Messages: 361

    You do have a point about standardization, but you are going to end up with an excel spreadsheet managing oil filters any way you cut it. It is nice to have one brand mower and only 2 deck sizes to keep stock of blades which is the same for trucks, push mowers etc. We have set up every single Isuzu to be exactly the same inside the box... I actually totally agree with you. I may regret buying a John Deere mower, it will be the only mower we have that is not Scag, and I am worried about the blades being a nightmare. I have a crew that could use an extra 60" so it was a cheap fix.

    I enjoy finding deals more than I do relaxing. I found the deal on the Scag while poolside out of town because I am obsessive about keeping cost down and I love negotiating and finding great deals. Negotiating is an art form that I enjoy sharpening and getting tougher and better and better.

    My statement was strong and brash. I should have withheld it, but I am used to hanging around sharks that are killers... it wasn't my intention to insult you nor was it directed at you. I am sorry
     
  9. snomaha

    snomaha LawnSite Bronze Member
    from midwest
    Messages: 1,164

    You say you're around the 2MM mark in sales - have any of your "shark" buddies told you about the black hole of small business you are entering? 2-3.5MM is typically one of the hardest plateaus to break through. Better have a war chest of cash, because you will start to burn through it trying to get to 5MM.
     
  10. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 14,774

    Sure

    Your ignorance can't insult me. Your intelligence can't insult me. You don't know me very well, understandably.

    Your comment was directed at anyone that buys new. It is what you said.

    No need to be sorry, I wasn't in the least bit insulted, especially since later on you contradicted yourself and proved me right.
     
    Mitty87 likes this.

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