Discussion in 'Starting a Lawn Care Business' started by GravelyWalker, Oct 10, 2012.

  1. MDLawn

    MDLawn LawnSite Bronze Member
    Messages: 1,284

    This is what they think.

    For you cash only guys, every guy using credit/finance/whatever you like to call it agrees not to finance every single little thing. Most would agree that is just plain dumb. I'd feel confident that a lot of the finance guys pay cash on many items. Or pay them off in a much shorter period than the full term loan.

    I know I love seeing this stuff too. Many 18-20 year olds with zero job experience/credit can't walk into Ford, the trailer dealer, & equipment dealer and get approved to finance everything alone. A, they'd probably need a co-signer, which would be dad or mom, or B, mom and dad finance it for them. I can't imagine an 18 year old getting approved on a $45,000 crew cab diesel truck on their own. Or if they can, is it even a reasonable rate?
  2. larryinalabama

    larryinalabama LawnSite Fanatic
    Messages: 19,646

    In a nutshell ownership of property is by far better thaen being a debtor. Will a debt free feller survive, if his hearts in the business most likely. Will someone with a 250$ ZTR payment survive, most likley if his heart in the business. Will some with a financed 50000$ truck to pull his 30000$ financed equiptment fail, most of the time.

    Will a debt free business failure ruin your life, NO

    Will a financed business ruin your life, not entirely but the next 15 years will be rough.
  3. larryinalabama

    larryinalabama LawnSite Fanatic
    Messages: 19,646

    It may sound unusaul but theres 14 to 15 year olds who start a lawn business in their neighboorhood. that allows them purchase equptment when they reach 20 for cash. I understand its unsual in a debt ridden society, but there still some exceptional people who didnt make it because of mommy and daddy.
  4. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Messages: 3,465

    I been in business more likely longer then you been alive, I have yet to go full term with a loan. I use credit just like equipment ,if it makes me money ,I'm in.
  5. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Messages: 3,465

    And again,if for some reason he follows the rules he wouldn't be having a pocket full of cash because a lot of people will have their hand out first waiting for their share.
  6. larryinalabama

    larryinalabama LawnSite Fanatic
    Messages: 19,646

    This is my second Lawncare Business, Im in my 5th year. I ran my first one 4 years and sold it, it was also successful, but I wanted to move out of So. California. I did have a truck payment on my first business, but I now realize theres far better ways of growing wealth, than borrowing money so I choose to be debt free.

    As far as a 15 year old making money.....please tell me you not the feller that wants to tax kids lemonade stands?
  7. CL&T

    CL&T LawnSite Senior Member
    Messages: 493

    The problem is is that you are a pessimist not an optimist. You believe that the probability of failing is better than that of succeding and you are terrified of failure. An optimist would not be afraid to take calculated risks, is not afraid of failure and would be prepared with ways to mitigate the damages should that happen. That's the description of a savvy business owner.

    If he was going to finance, expand, etc. he would be sure that he had the reasonable expectation of future income to cover the costs. That's just common sense. Financing equipment with the hope of getting enough business to cover the cost is like buying a lottery ticket then buying a new car in the hope it will pay off.
  8. larryinalabama

    larryinalabama LawnSite Fanatic
    Messages: 19,646

    Im neighter a optimist or a pessimist, Im a realist. I plan to succedd and in my solo theres no need to take the risk of borrowing money, I have enought paid for equiptment to run another crew as well as start a landscaping crew also. Its also possible that a long drout can happen anytime, and the bank doesnt really care. So with that being said Im better prepared for anydownturn far better than my compediators.

    If a business is profitable, it makes sinse to "reinvest" a portion of the profits if you want to grow your business. At some point in time in everyones life and in every business the idea will be to make money that is real hard money that eventually will go to your children.
  9. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Messages: 4,891

    Well guys.

    Everyone is right in my opinion. The cash guys. The finance guys. Every example makes sense.


    If everyone has all the answers and knows the right way, why do most struggle to make payroll everyweek or why do I hear from my supplier that he has to make collection calls to 80% of his accounts?

    The fact is things dont work out in real life the same way they do on paper. I was doing a million in sales, less than a million in expenses. Yet went out of business.

    If I got one check a year and had to pay one bill. I would have a nice fat bank account.
    On paper I was making a ton of money. Yet everyweek i struggled to pay bills and make payroll.

    But on paper, there was nothing wrong.

    I was not living beyond my means, I was not financed beyond my means. I didnt buy more than I could "afford" but I couldnt make the payments.

    How is that possible?

    Human nature and inexperience!!

    Now, I talk on a larger scale then many are. A solo op, well in control of his business, financing a ztr....Not a problem. Id do it. You can control that easy.

    How about when youre trying to grow big, and fast. And taking jobs that require financing a lot of equipment very fast, and then taking the task of now running a business instead of running a job. Without the experience and knowledge of running a business.

    THATS what my threads centered around. THE TIPPING POINT.

    When you got a good handle making love to one woman.
    Then you get two at once....THAT WAS AWESOME.
    They walk in.....You say....I GOT THIS!!!!
    Then you realize shortly into it, youre trying your butt off.....But you dont got this.

    Managing a book of business with simple, money in, money out is easy. Youre not going to bankrupt yourself out of business when you buy a truck and a new ztr on credit. You have a good hold on it and know if you can afford it. "My first 10 lawns of the week pay the truck note, My next 5 lawns pay the ZTR note, I have 50 lawns" Easy stuff.

    Its nice that there are so many people that are born natural corporate financial experts on here. Most dont have that experience or education.

    I know how to run a company by the numbers. I know how to calculate. I know how to run by the book to be successful. But when it comes down to it, the real world takes over and I cant follow it to the accuracy that it needs to be followed.

    I know I cant do that. Most people cant.

    My way isnt the only way. I do things now that dont add up on paper to make the most sense or be the best way. But I like the discipline and safety of that approach.

    Every job I do I have to have someone run back and forth all day with my 500 gallon tanks to the supplier to keep up. Burning all that gas and all that payroll. I need a 2000 gallon tanker truck. Add up the gas and payroll alone, it would make the payment. I could get jobs done faster, free up an employee, free up other equipment, grow faster, burn less gas, be more efficient.

    On paper it makes so much sense. Im drooling over a nice red Peterbilt online right now that I could have tomorrow if I just make one call.

    But Im holding off. It takes me a little longer to do a job. I dont look as cool. I just know myself and I know that I dont have the discipline to go down that road no matter how well I know the business.

    You just think different. There is something about the pain of writing that check that feels right. Something about looking at your bank balance right after and even though you bought something you needed and wanted, you feel a little sick.

    But in the end. This way.....The bank balance bounces right back and grows and very shortly I dont even notice that purchase I made.

    Yet, If I were paying $300 a month for it.....Somehow It never worked the same.
    So my personal opinion. There are examples of successful business on both sides.

    To run a business with heavy financing requires skill, discipline, and education that most people do not have or cannot apply.

    To run a debt free business is much easier. You have the money or you dont. You buy something and either you have more work to replace the money or you have a piece of equipment and no money.

    Either way you have something.

    Again. 90% of us fail. Ive failed more than once. Im just too stubborn to give up.

    But for the first time in my life, im going into winter without a care in the world. Im going to park all my stuff until the spring and it wont cost me a penny.

    Hopefully others who finance, did everything right, saved all year to make sure they had the winter payments covered, hopefully nothing comes up to have to divert that money, and they can write those checks every month and be just as stress free as I am.

    If thats the case. Are we both not doing the right thing?

    My gut tells me there are many more however who are like I was this time of year.

    Looking at the checkbook and wondering where that pile of money that the balance sheet and P&L statement shows that you are supposed to have right now to get through the winter is.....

    Now youre thinking......What can I do for work all winter to cover these payments.
  10. PROCUT1

    PROCUT1 LawnSite Platinum Member
    from TN
    Messages: 4,891

    Also. For a while and even now in most ways I lost the ability to have access to credit.
    It changes how you operate. When you NEED to get paid.

    My attitude changed from getting the work, to getting paid.

    I have 0 bad debt and 0 collection problems. I take 50% down and have the check waiting for me when we are loading up the cones. In the past, no big deal, Ill send you a bill, if it takes a while, no problem, thats why I have a credit line.

    Always thought...."Companys just take a while to pay" "Their policy is 45 days, its just the nature of the business"

    When you cant start the next job until you get paid for this job you have to operate different.

    Im not that cash strapped anymore. I can afford to let people go a while. But I dont.

    People know my company isnt a tiny desperate operation living hand to mouth.
    Yet every job I do I state up front.....Please have the invoice processed so the check is here when Im done.

    Until I had no choice....I never knew how to get around the process when they say "We cut checks on the 15th. We pay Net 30." Thats just how the big boys operate and if you want to work for the big boys you have to be a big boy too.

    Well, every single job Ive done over the past 2 years I get around that process.

    I just ask. Never been turned down yet.

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