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Discussion in 'Starting a Lawn Care Business' started by ON-THE-GREEN LANDSCAPING, Sep 3, 2007.
In the end, cash is always king.
I would argue that there is a 0% price and a cash price... the interest is factored into the price of the truck. And hopefully if you are buying a 20k truck w/ cash... you have 100k in the bank. I am not saying credit is a bad thing. I am just saying life w/ out debt is much more enjoyable. I can't wait to have my house paid off in 2.5 years and be completely debt free. It is just a feeling of freedom. Granted I know when you are trying to grow a business it is hard to be debt free.
Having credit is good. Being in debt is bad. Being able to get the parts you need at a supplier and pay in 30 days is very convenient. Paying $20,000 for a $10,000 mower because you financed is a waste of money.
The value of equipment depriciates much faster than it's useful life. A mower with 80% of it's life left will likely only cost you 60% of what a new mower would cost. Good used equipment is a smart investment, probably smarter than new.
I agree. I run up 7k balance on my credit cards each month... but they get paid each month. I also have credit lines at suppliers.... it is nice but the trick is paying everything off every month.
I also agree w/ you on used equipment. I have found that I can score some great deals w/ the punch line "cash money right now." My deals that I have paid cash for included, '04 Scag 450 hours - $4500, 03 Dingo tx425 400 hours - $5000, 2000 Cat 248 2000 hours - $4500.
I have also find if you pay cash on used equipment and buy it right you can use it virtually for free... selll it for about for you have in it. I actually bought a package deal of mowers and other equipment for $8500 on Labor Day... I sold it on Saturday for $12,500. Quick profit thanks to cash.
Lawnworks - I totally agree with you about the freedom of living without debt hanging over your head! Its a great feeling! I guess Im kinda speaking more from the perspective of my business and not as much from my personal finances. I know in small businesses it can be hard to seperate the two completely, but I try very hard. I also would have to agree that you can get some great deals by having a stack of cash in your hands!
Starting out from scratch without being able to afford good equiptment is tough...in any business. Your only real option is tighten your belt (alot) and buy something well used, and work really hard. Then upgrade asap. This will also help you to only grow your equiptment if you NEED it. otherwise its just sitting there and depreciating. May need to pass up some good jobs that you are just not properly equipt for, but such is life. The first few years can be the most trying...
(ps - wow, i need to go back to third grade and learn how to spell! )