How much $$$ to start???

[dapozer]

I am thinking of start up and looking at borrowing some money from the equity in the house. Is this a good plan? what should I look at when trying to figure out how much? I know equiptment cost and ins, gas, maint. But what about extra cash for safety ie pay bills, wages ect.
shawn

 

[YardPro]

i would imagine at least $25K

 

[Trinity Lawn Care LLC]

Shawn, 1st I want to say good luck in your new venture. 2nd: I normally warn folks off from using home equity for starting up their biz. Let me ask you this. If your business fails (and I am not saying that it will and I hope that it doesn't) how will that affect you financially? If using equity in your home and the business fails will you be in a financial position to still pay for the debt that you incur? Would the debt load force you into bancruptcy or even foreclosure? Do you have a solid business plan together with an exit strategy? With that said. If you feel that you have a solid plan the next step that I would take is consult your professional consultants i.e attorney and accountants, and get their opinion on this matter. If they say go for it then go for broke man! This is JMHO. If you are gonna borrow on credit I would just borrow on personal credit. This way if you lose you don't lose everything.. The problem is people do not plan to fail, but the reality is many will. You have to look at the big picture and ask "how with this affect my life". Again, hopefully you will be very successful. I am sorry for the long post I just do not like to see people put themselves in a very risky financial situation without knowing the what could happen's. Again this JMO.

 

[bohiaa]

I agree,

maybe you should do it part time and see how it goes.

a Lot of us "myself included" started with an ole broken down mower, a line trimmer the was junk, and a rake......"my hedge trimmer was electric"
From there we built up....


My father used to say "they don't hire 20 year old presidents"

getting commercial accounts is tough, and you MUST have a ton of insurance.

Other than that. I would NOT spend a lot of money on fancy equipment.
Not enoulf to have to borrow money.

I'm a computer engineer, when the field went belly up, I just grabbed my tools and went and made a living.....
with the junk that I had...

Good luck

 

[Spratz86]

I'm new to this, too, but I don't think you should go in massive debt to start a business. Start with what you have, add to it used and go from there. Put 10 to 15% back into the business and soon enough you should have enough to upgrade.

Home equity loans, or any type of loans for that matter, are a fools game. Your just paying interest to people/institutions with money for things you can do without.

My advice - listen to Dave Ramsey!

 

[The landscaper]

I agree with starting small. Don't kill yourself by digging such a big hole up front. It is pretty easy to get started with lesser grade equipment and you most likely have some at home. Just get by with what you can afford and as jobs start picking up, use that profit to get the bigger and better equipment. This will save you the rish of failing business taking you out financially.

I doubt this is the best way to start every business, but in this line of work, it isn't too hard to get going.

 

[cwlawley]

I too would start slow. Use what you have and put all the money that you make into savings. As your savings grows use that money to purchase equipment that you need.

If your savings is growing that also means your business is successful, somewhat. If you see yourself wanting to continue in the field look at taking out a home equity later for better equipment.

 

[jasonnau]

It depends on a couple of things. First of all, do you already have at least a 1/2 ton pick up truck? Preferrably a 3/4 ton? If not, you need one. I started spring last year by trading in the 02 ford ranger for an 04 f250. That put me $28,000 in debt with the negative equity from the ranger. Now, that is a write off, but, I have to pay 462.00 per month on that truck. Next, do you want to plow snow? If so, make that a 4x4 3/4 ton truck. Plan on $5,500.00 for plow and spreader next winter. If your serious, you'll need at least a commercial 48 to 60 inch mower. Hydro prefferably. Look at at least $4500-$6500 for that. Not to mention at least a $300.00 blower, $250.00 trimmer, $1300.00 for a trailor, $200-$600 for a "21 inch mower, And add in at least $600-$800 for small tools, wheel barrows, ect.. But, if you start small, you'll get all of this stuff in time without the immediate overhead. All and all, I bought what I wanted and needed the first year. I made some mistakes. The Ford was a 2 wheel drive, and i wanted to plow snow. Ended up spending $11,000 the same year on a 1998 chevy 3500 4x4 with the plow and spreader. (That was a great deal). Bought a new 60" ex-mark turf tracer, and all new stuff. Including the trucks, I spent at least $50,000 to start. But, I had no problems getting enough work to pay off everything except the trucks in the first two years and make more than enough money to get buy just fine. In fact, after the first year, with write offs, I had enough left over to pay off all of my wife and I's personal debt. Now, we're buying our first house. I'm not by any means rich, but, I'm a hell of a lot better off than I was two years ago.

 

[jasonnau]

Oh yeah, I used a credit card to finance everything except the trucks. I put $12,000 on that. It's almost paid off 1.5 years later.

 

[garth1967]

Shawn, 1st I want to say good luck in your new venture. 2nd: I normally warn folks off from using home equity for starting up their biz. Let me ask you this. If your business fails (and I am not saying that it will and I hope that it doesn't) how will that affect you financially? If using equity in your home and the business fails will you be in a financial position to still pay for the debt that you incur? Would the debt load force you into bancruptcy or even foreclosure? Do you have a solid business plan together with an exit strategy? With that said. If you feel that you have a solid plan the next step that I would take is consult your professional consultants i.e attorney and accountants, and get their opinion on this matter. If they say go for it then go for broke man! This is JMHO. If you are gonna borrow on credit I would just borrow on personal credit. This way if you lose you don't lose everything.. The problem is people do not plan to fail, but the reality is many will. You have to look at the big picture and ask "how with this affect my life". Again, hopefully you will be very successful. I am sorry for the long post I just do not like to see people put themselves in a very risky financial situation without knowing the what could happen's. Again this JMO.

heed those words ,good advice. people that borrow to start up are shocked buy the fact that for the first few years money is coming out of the pocket.you know your financial position better than anybody.just remember your initial start up cost is only the start of the costs