Question about loans

[Scaper-S2k]

No, don't get me wrong, I didn't say get anything other than the 21". I just wouldn't spent the $$$ you mentioned on them.

3 men mowing would be even worse with smaller mowers and smaller lawns.

The smaller they go, the smaller the crew should go.

[njnewbie]

Never said three men mowing.

With two men mowing, avg 10-12 minutes to complete the yard. Just enough time for crew leader to trim, edge, and blow.

Also, you definitely have to use commercial 21's, not just good residential ones. We took a $400 Toro Super Recycler into the field last year and it was shot within one week. Bent shafts and busted wheels among other problems.

[Seascape]

Id come up with plan B.

No bank is going to give you 60k.

Not being argumentative with you,,,, simply stating a fact.

[GeeVee]

Agreed....

[GrassMaster]

Hey Everybody...

A great discussion, so I'm moving it to the Running Your Business - Office Issues Forum!

We need more good down to earth discussions like this one!

[Hydro DRIVE®]

Maybe the naked golf carts would work using indigents from the local soup kitchen.

All you need is a large open landscape trailer to move the homeless solo operators from subdivision to subdivision.

[Elwood]

Regardless of how you plan to do this, for any type of loan from a bank, you will need more than a business plan. You will need proven profitability and collateral. Your mowers may be fine, (and I did miss the part about using only 21 inch mowers), but you will need collateral for your advertising and misc. dollars borrowed.

Here is a thought. If you can trim your advertising and misc. budget, you can finance your trucks thru any bank right now, and if you are going in to buy a half dozen mowers, trimmers, blowers, etc. from the same dealer, they may offer you financing, great. Next, if you are dead certain, and this is a big gamble on your part, that you can pay off these loans quickly, I get a half dozen credit card offers in the mail each week offering Zero percent interest for up to 12 months, apply and use that card for your advertising needs, understanding that it gets paid back in time your you will probly be hit with 21 percent interest.

There is more than one way to skin a cat, but I would do my best to keep borrowed money as small as possible. Remember, interest is NOT your friend!

[GeeVee]

Im not a banker, but I did stay at a Rancho Varano® last night.

Credit is credit is credit.

Truck loan, Package Financing from Scheffield or American Consolidated, and Citi/BOA/Big Box Bank MC-VISA are all going to see the same thing when they run your application......

Suddenly, you've been asking for all kinds of money- with no history, and no reportable income to speak of.

ONE of them, or all, will tell you, you have reached your "debt to income ratio". Period.

This is real. They actually are keeping track of how many apps you put in and know the disposition of each. There are no secrets, and you are like an open book.

Not knocking your piece meal labor method, or your advertising train of thought, or even your crew/equipment choices....

If it COULD work, it can be done as it evolves for cash. To go from 100 to 500 accounts is unlikely, therefore gearing up for THAT is unecessary.

One redeeming quality about your basic plan is that you POTENTIALLY could have something to show your personal bank rep.. If you are lucky, you have your nut and your checking at the same local branch, and you are reasonably known there. The "contract" -stipulatiing CC's for billing purposes, may be a scent for your personal rep to open you a line of credit, if you thrown them a bone. (Let them think its their idea to run the money through their mills, when in all reality is was going there, anyway.) Try and go in with the stack you have pre-sold for your "season", and be ready to act surprised, and still cough out casually "what about the increases in the credit line?" for every seventy five (arbitrary) new "contracts".

Answer this?

What was the gross and net from last year?

For how many "accounts"

And was this the CC' method?

But the real kicker is....

How much of the net (from '05) is ready to be deployed as operating capital this year.....?

I'd not go into debt over a 21" mower.

I WOULD, since you are salivating over your business model, be buying all of the Toyota mini trucks I could find and find a cheap producer of a flat bed/dove tail for them.

[GeeVee]

Establish a relationship with your banker to do this as it evolves. "When do I need to be back here with my "contracts" for you to pull the trigger on loaning me the money?"

Or to convince you fully you should be listening to my advice-

Your whole methodology of having the contracted "season" be paid/billed through a CC is for what? SOLID CASH FLOW.

With SOLID CASH FLOW, what do you need credit for? You have no stinking overhead.

OOPS it supposed to be POSITIVE cash flow, but that could just mean its coming in faster than out..... Hmm. actually sounds like a person that works for/to, pay off a bank debt.....

Print the whole thread and carry it with you to your bean counter..... See what he/ she says.

[Scaper-S2k]

The bad news that will make you need to rework the math:

Payroll.

With one guy or so, you may get away with no WC or something else for a year or two. But it will catch up with you. If you hire a few more, the need for WC and insurance is an ABSOLUTE MUST HAVE. I understand your situation right now, and I'm not saying I would ever do that. But it's done, and time to straighten it out.

The problem is that all those agencies talk to each other. WC runs off of the amount of payroll. You need to be able to show what you paid. And your state stuff obviously needs to match your state Workers Comp payroll. Your state compares your forms with the federal forms. You can't do your federal unemplolyment report without knowing what your state unemployment rates are.


So, what I'm saying is that you are asking about WC, but understand that you can't choose just one organization. With one comes all.


And you just will NOT be able to operate what you are talking about without all of them.

If I was 17, in school, and only made $7000 all year? Well, I may not be too concerned. But going full scale? It's a must.




And of course, sometimes a bank will want to see your profit/loss after the first year......assuming you are starting a new biz (which you are in their eyes). They don't want to loan money, and then just hope. They want to see that you are going to make it.


Ya gotta be legit to expand.




I think the 'average' percent for all that WC, unemployment, FICA, etc is around 30% ??? Depends on your states WC rate and unemployment rate (which can flucuate).

[Seascape]

Its probally harder than you think to find good help to take a gig that far that fast in a year.

Sometimes even if you have huge payroll at your disposal,,,,,,,,,,,,,,,,,, finding experienced,reliable,responsable,honest,dedicated help is impossible.

You dont have calander weeks to just lose due to poor help. Get in a jam with a gig that caliber and its very hard getting out of the rutt.

All my years ive probally found 10 very good employees (like you need to do what you want),,, several mediocre employees,,,,,,,,, and several tons of crap looser employees.

[steve-o]

Steve that might be true if your business model is seriously flawed but I think it can work here. It may be a shaky process the first year and a very big hump to clear but it will be well worth it.

Also please read the whole thread. I'm not solo, I have two employees.

95 lawns/wk (about 110 with some bi-weeklys) are my current numbers but don't in any way reflect my season gross, which is much much less than $60k. First of all for the first five or six weeks of the season I had no employees, so I was purposely cutting all my lawns every two weeks in order to handle the schedule, which needless to say lost me a good number of the core accounts that I started with. Then I picked up 60 lawns in two weeks of July. And this is the only season I've made any real money. The first season I had two partners and I made peanuts, and I made a little more last season with one partner, but nothing significant.

i did read your thread and your 2nd post said solo and sometimes 2 guys. who cares anyway. i have read all these post and agree with most. i think if i were you i would keep what i have now, finish school and then make my choice. even then i would increase my size as needed. 100 to 500 is crazy. i would go with maybe a 3 or 4 or even a 5 year plan to get that big. you go that big now and screw up ,you just messed yourself up big time. take your time with this. you said this is the first year you made $$$ at it so be patient and do things the right way and have something for banks to see. if you don't i would think you will fail.this is my 3rd year, the first 2 being partime and i might add a very legit partime. this year i was sort of pushed into fulltime and it has been great. however, there is no way i could quadruple my business in one year even if i tried.i am older than you and my needs are different and i don't want to get big. that being said , use that brain you got and make the right choice. i would think new jersey would be a tough deal on everything . i have one daughter who goes to school there and my wife is from there. ins. is crazy. good luck in whatever you decide !!!!


steve

[vaughnslawns]

I don't see everyone giving up thier VISA/MASTERCARD #'s

[Elwood]

You biggest hurdles are these: A proven track record of profitability, and employees. The banker will balk at one and you will struggle with the other. Everyone does.

I would do an advertising blitz, grow at what pace you can grow and buy equipment along the way. Buying 5 crews of equipment to be sitting in waiting is a little much anyway. You should have some $$$ sitting there for advertising for next year after this one is thru, use them smartly and see where it goes. When you need another crew, buy an inexpensive truck and you should need a couple grand in equipment for that crew, pay cash for it and go with it. Your job will be training employees and selling, period. Not sure in your state, but many states, people say that paying per lawn is not legal. You can however have a low hourly rate with bonuses for each lawn completed to specific standards, but just paying per lawn, I would check on.
If you are not already, get legit. WC, Insurances, payroll taxes, everything, then crunch your numbers real hard.

In the end, I would keep debt as low as possible. If things go as well as what you are planning, at the end of next season, you will have your 500 lawns, your equipment will be paid for, without interest and all you will have is a few truck payments. If your sales goals fall short, you won't have a ton of debt staring at you, only a couple truck payments.

[Bobbygedd]

the boy is in la la land, and apparently has been operating in the past without wc ins or business liability, or even comm auto, which = illegal. here is your biggest problem- you have xxx amount of clients, that u have been servicing, while operating illegally. now, start doing it legit, and you'll need to raise those clients by 20-30% at least. how will that go over?