A quick way to kill your lawn care business is to spend more than you make. The concept sounds simple enough, but still, why are so many lawn care business owners burning out at such a fast rate? There are many reasons why they are overspending. They may be trying to buy happiness, maybe it’s guilt, a lack of patience, an inability to say no, shame, laziness or other reasons. One of the biggest reasons I see is trying to impress others. Maybe it’s other lawn care business owners in the area or maybe it’s customers. Let’s take a look into this further from a discussion on the Gopher Lawn Care Business Forum and see why one lawn care business owner overspent. Maybe this discussion will help you from going under.
One business owner wrote “I think there are a few other reasons people tend to overspend. Personally, I see many people in financial trouble and most of them have no concept of the value of money. Even my own kids have the belief that they are entitled to have items and really don’t understand that if you want something, you may have to save for it or work harder for it.
As for me personally, I’ve been there myself. At one point I was so far in debt that I didn’t think I would ever get out. Then I got smart and started living within my own means. I was lucky enough to see this before I went into business for myself.
Right before I started my lawn care business, I sold everything that I had. My home and all and paid off all my debts. Ever since then, I have used the belief that if I can’t pay cash for it, I can’t afford it. That being said I do believe that a house will be something one will need to have a mortgage most of the time.
For my business, I bought a 4 year old truck, paid cash for it. Then bought a used cargo trailer, new regular residential mower and a few items such as trimmer etc to get started, all of which I paid cash for, and cut some corners on food, clothing and household items for a few months. One would be very surprised, just how much more free cash one has when they don’t have debt payments hanging over their head.
Since starting my lawn care business almost 3 years ago, I have been able to move up to almost a full line of equipment and am still expanding, while all the time having no debt.
Trust me guys, avoiding the use of credit will get you further ahead in the long run. Think about this example, say you go out and purchase an item that costs you $2,000 on credit. That item has to do more work to return the same profit, as it has to pay for itself. If you paid cash for it, everything that item does is already putting cash back in your pocket right from the start!!!
From going through my financial meltdown that cost me dearly, I now have new financial rules I follow. Personally I think everyone should have a n emergency fund to cover at least three months of living expenses in the bank at all times. I now prefer to have 6 months on hand. As for savings goals, one should have some for retirement plans, smaller equipment goals, larger capital purchases and what ever else you want. The amount or percentage would be determined by how soon and how much you need to save. I have been known to bump up certain accounts to get the goal met sooner and lowered some for a short time. Saving is an art and takes time, but in the end it is worth it!
My main point is, one should not use credit cards to purchase items that you don’t have the cash to pay for. Did you know a credit card with a $1,000 balance, paying the minimum payment every month would take over ten years to pay off!!! Now, who really is making the money. It sure isn’t you and I, it is the banks and credit companies.
So stop buying equipment you don’t need, to try and impress people who don’t care. Save your money. Build up an emergency fund. Don’t buy anything on credit. Follow these goals and your business will grow and you will stop worrying at night about your financial situation.”