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  • Do use a Consumer or Commercial Mower?

    Which kind of mower do you use?
    Commercial
    or
    Consumer
    lawn mower model?
    15
    Commercial Grade Mower
    66.67%
    10
    Consumer Grade Mower
    33.33%
    5
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  • #2
    Which kind of mower do you use?
    Commercial
    or
    Consumer
    lawn mower model?
    I currently use on most lawns my Toro Time cutter Z, It is a consumer mower i had b-4 i started, and i picked up a gravely 32" walk behind used that will get me in most gates. I plan on getting a new Commercial Z prob. a toro maybe a scag next season as long as things are going ok, i dont want the debt, i would rather pay cash, but if i do finance i never finance anything unless i can pay at least 2/3's of the price at the time of purchase, a little trick i learned from my father many years ago. Then it was on a car, and his thought on getting a loan to buy is this " if you are going to buy something that you need, and will always need, why pay more. For example, buy out of need not out of want and you will be much better off in the long run. So if i was to buy a new truck and put 2/3's the price down then i would be able to pay it off in a year or 2 and no long term debt, right? But the trick to it is, i will most likely keep and use this truck for 4 to 8 years, so when i pay it off say in 2 years with payments of aprox 350 a month, i dont stop paying that payment since i can already afford it in my budget, i just instead of putting paying it to the bank, i just put it into a savings account, and then i will have enough to put towards a new one when the time comes.
    WOW i Really got off base and jabber jawed , sorry

    Comment


    • #3
      Sherman,

      That is really good stuff! So even when you are not looking to purchase anything, you are banking money as if you were going to?

      Can you help me and other readers try to figure out how much we should be budgeting to do that?

      I mean how does anyone do that?

      Should we just save everything we can and then we are alright?
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      • #4
        I was doing a little research to look into this matter more which I am very glad you brought up.

        Now say you were going to take out a loan for a pickup truck for $20,000.00 paid off over 4 years.

        I am including an amortization chart of the payments thanks to this site
        http://www.bankrate.com/brm/auto-loan-calculator.asp

        Please look at the chart.

        Your monthly payment is $477.53.
        Of that $60.84 on average each month is your interest payment.

        Now the question is this.

        How on the financial edge are you? How on the financial edge is your business?

        If you had $20,000.00 sitting in the bank, is it worth it to you to pay $60.84 more per month to keep it there and take out the loan or is it better to take that $20,000.00 out and pay for the truck?

        Or if we used the theory you presented. Let's say you paid out 2/3 of the trucks $20,000.00 or $13,333.32 and then took a loan out for $6,666.68.

        Your monthly payments would be $298.04.
        Of that, $20.25 would be interest.

        It's very interesting to think about because money is the life's blood of a business. When you have a lawn care business and it's seasonal, the more you can horde cash in reserve the better chance you will have to smooth over the rough spots.

        Would you rather have cash in the bank available at a moments notice in case of emergencies or opportunities? Would you rather have a loan and keep your cash on hand? Or would you rather invest the cash as a down payment on a piece of equipment?

        Can you make more with that monthly loan investment into that piece of equipment by utilizing it than you are paying? Is it making you money plus a profit?

        These are all very important things to think about!

        What is your breaking point? When is it better to have cash in the back waiting for an opportunity or when is it better to invest that cash into a piece of equipment in the form of a down payment?
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        • #5
          Commercial and only commercial

          The latest push mower I just bought was commercial



          Built to last 20 yrs, the motor will probably go before the body of this mower

          It weighs 132 lbs but thank god for self propelled

          And I am getting a ZTR in the spring so I will have all commercial equipment

          Comment


          • #6
            Justin,

            What is the cost of such a commercial push mower? Did they give you a lifespan rating on it? How many hours?
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            • #7
              Justin,

              What is the cost of such a commercial push mower? Did they give you a lifespan rating on it? How many hours?
              About 1000$ + taxes.

              It's built out of cast aluminum. I could bash it with a hammer all day and it wouldn't break. I would break my hand before anything

              I would have to check my books for the lifespan but I'm sure it's alot

              Comment


              • #8
                Very interesting! If you'd like, I will do some research on the lifespan of it if you know the model?
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                • #9
                  W21S - S for self propelled (i think)

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                  • #10
                    Your monthly payment is $477.53.
                    Of that $60.84 on average each month is your interest payment.

                    Now the question is this.

                    How on the financial edge are you? How on the financial edge is your business?

                    If you had $20,000.00 sitting in the bank, is it worth it to you to pay $60.84 more per month to keep it there and take out the loan or is it better to take that $20,000.00 out and pay for the truck?

                    Or if we used the theory you presented. Let's say you paid out 2/3 of the trucks $20,000.00 or $13,333.32 and then took a loan out for $6,666.68.

                    Your monthly payments would be $298.04.
                    Of that, $20.25 would be interest.
                    ?
                    Well steve all good questions, think about this though. Why are finance companys in business? To make money, and they do. So instead of paying them the interest, why not pay yourself the interest? Ok, cash is king always, so what you do is this, you still save all that you can, you still do that if you have a truck or a mower financed right?, this way, you set up another alltogeather savings account labeled Equipment, and you continue to put the amount of the payment in this account as if you were still paying the bank, this way it is as you are paying yourself the same interest the bank would have been getting, and since it is all going into your equipment acct, you will have enough to purchase the equipment when you need it faster then you would pay a loan off, so you are actually saving even more over time. Also think of this, you said what if! there is always what if's, and what if something major did happen would it also be nice not to have a bunch of payments you had to make every month, since you were paying yourself those payments if you had to you could put them off with no repercussion's. so if you financed that truck you would be paying that finance co. $3,342.71 in interest, that comes out to $835.67 a year of a 4 year term which intern is 69.63 a month more. Dont know about you guys but even over 4 years 3342.71 is still alot of money to give away, throw away. Just my thoughts, remember that even when your paying that payment you most likely are saving something anyway, this is besides that, and as far as that 20k, if you did not pay it to yourself each month and payed the finance co then would that 20k even be in the bank?

                    Comment


                    • #11
                      I'm all commercial, The only way to go in the long run. But you guys already knew that about me...

                      Comment


                      • #12
                        Sherman,

                        Would there be a tipping point interest rate that would make you finance a larger amount of a truck or piece of equipment?

                        I do wonder about this because this is something I think would be a risk vs. reward issue.

                        I am not sure at which interest rate does the scale tip one side or the other but this makes me think of insurance in a sense.

                        Legit lawn care business owners buy insurance because they may need to legally and they know the risk vs reward is not in their favor to self insure.

                        I wonder if financing vs not financing is similar to insuring vs. self insuring.


                        What are your thoughts?
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                        Comment


                        • #13
                          Sherman,

                          Would there be a tipping point interest rate that would make you finance a larger amount of a truck or piece of equipment?

                          I do wonder about this because this is something I think would be a risk vs. reward issue.

                          I am not sure at which interest rate does the scale tip one side or the other but this makes me think of insurance in a sense.

                          Legit lawn care business owners buy insurance because they may need to legally and they know the risk vs reward is not in their favor to self insure.

                          I wonder if financing vs not financing is similar to insuring vs. self insuring.


                          What are your thoughts?
                          Steve
                          Good Question.
                          The way i look at it is, ok, say i buy my new mower on time, then i make my payments evry month of $265 for 2.5 years, now i have made a habbit of making that payment, it's now in my budget . I know 265 is going out every month. now at the end of the 2 1/2 years instead of re-allocating that money elsewhere, i keep paying that same amount into my equipment account, which in turn builds up, and by the time i have to get the new mower again i dont have to re-adjust my budget, its already in my budget i have been paying it to myself, and the money is there if i want to use it or not.

                          As far as what rate would i go with, well i bought a new Dodge Ram in 04 and financed the whole thing @ 0% was not charged to use there money so ya go for it., i dont beleve you should ever self insure though.

                          Comment


                          • #14
                            I have a question

                            How many years/hours do companies start trading in for better/newer/upgrade equipment ?

                            My tractor just hit 300 hrs today and it's only 2.5 yrs old.

                            Use and abuse, I think I am ordering myself a commercial mower during winter for the spring.. I hope I get financed.

                            Comment


                            • #15
                              I bought a new mower, and I decided it wasn't worth the $1,200 - 1,500 I would be paying for a commercial mower. As long as you're not thrashing your mower around, a high end consumer model works just as well. I used a cheap piece of junk from Canadian Tire before (it was about $250) and it lasted 3.5 years. The new Toro I got was $500 and has a two year warranty for everything, it's pretty solidly built and I haven't had any problems yet.

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