Thread: credit card or personal loan

Credit is the anti-christ...and the same logic goes for a lot of my mates. If you cannot afford to pay cash upfront, then you cannot afford, simple as! Otherwise you're facing an uphill battle and going to whoop yourself...unless you're onto a certainty.

Owing money in any shape or form is not the way to go, unless it's unavoidable mate and you can justify it. Interest rates are going to rape your business for a long time no matter what. A mate n I have deliberately held off our business plans for a year or so, so that we can save the money and avoid loaning money at all...we have the idea of 'all that we have we own', n that's the best way to starting up business. Start small and don't overreach yourself.

For what it's worth, neither of us have credit cards, and we both own our own properties outright, plus have savings for our venture...credit's for chumps without planning and hopeful ambitions.

A bit late to post here but, nevertheless: have you considered hiring your equipment (i.e. bobcat) for the particular job? By doing this you will slip committing yourself to your debts. Any loan would make your life more troublesome, unless you will have a guaranteed amount of work (and thus, income).
I understand exactly where you are coming from, having a job at present you are fed up with. But if you wish to pursue an alternative you should make sure that everything is sound as you will be back at square one in no time at all otherwise. I don't want to talk you off your venture, but you definitely will have to make sure you know about the implications. A business plan is a must, likewise balanced and informed advice of a trustworthy accountant or similar professional.

Good luck!

My mate left being a small bus. tradie as like the previous post said got sick of waiting around weeks/ months for people to pay their bills while he was short of stock, fuel ,cash for his other 2 employees pay, maint. on his vehicles etc. So talk to a profesional accountant as you will need at least 3 months running $$$ with no other incomings as a reserve.

i understand everything im being told and taking every bit on board but remember that for atleast the first 6months i will still have a day job(40hrs/week) and be paying off 20k just like i would if i had a nice car, on saturdays i will operate the income from that will go straight into the buisness legit and on paper taxes paid fuel grease and oil for the machines will come from my wallet but will be recorded what they are as a referance so for the first 6months from the money incoming the only outgoing will be repairs and taxes, insurance will be payed for the first 12 months from my money i do have svings just for starting but there not for equipment purchase

That's exactly the point, mate! You are keeping your present job and will be doing this five days a week. You will be able to use your bobcat to make money on two days during the week at most. Which means, it will cost you money the remainig five days. So, why not making a contract with a machine hire? You might even getting a better deal when booking well in advance or regularly. I don't know your place but where I live there are quite a few outlets of a business which rents out everything from a simple spade to a 60 ton mobile crane. You will save $$$ as you don't have to pay interest on a loan, don't have to pay insurance (maybe even tax on your equipment) and don't have to worry if something breaks. Rent it when you need it, that's it.
IMHO it is not wise to start off your business with too much of a financial commitment if it can be avoided. Buy your bobcat when you quit your present job and go self-employed full-time.

Cheers

Can I suggest you do more research.

Lock in some possible contracts with builder mates.
Do a income projection with possible work.
Some weekends you may not be working but see what work is out there.
If the machine is just sitting there during the week perhaps look at hiring it out to locals for x amount.
If you are working 40hrs/w already, 10-15 more hrs on a machine can really take it out on you.

Look at the machine as just another tool as very shortly you be sick of driving an excavator, just ask some operators who been using them for years.

definately do a Business plan and get your partner or parents to read it back to you and see if you would lend this bloke some money.
Make it sound professional and make sense and quote real figures as financial institutions are not silly and will look straight through a half baked idea.

As for not employing anyone, why?
By what you are doing, you are buying youself a job and thats it.
You are probably thinking its fun sitting on a machine and digging but trust me, in the heat or rain, its no fun.
When something brakes and you have a dead line and the contractor has put liquidated damages in the contract so when you run late and can't finish on time you will pay penalties and they can be huge.
$70/hr seems a lot but with insurance, tax and tax and maintenace, whitecards, and periodic inspections now the norm on construction sites it quickly twindles away to just another basic wage.

Do not let the interest you pay bother you too much as that is just another tax deduction, most business loans are actually interest only anyway.

A good accountant is a must as said many times on here.

Put an add in local paper and see if anyone rings, just for feedback and tell them you will be onli working soon and be honest that this add was just to test the water.

If you really want to make some cash, working a single machine is not going to do it.
Get one and get a person to work it, get your margin and make money all week on that machine. work it and you work on the business rather than in the business and look for more work and supervise.
Get to a point where you have 2-3 machine so a breakdown will not impact a company to a point they feel let down and not use u again.

The word gets around quickly.

Good luck and if you really want something, you can make it happen but do it right, a slip up can kill a person on site and you may never work again.

Keep focused and I am sure with planning this can be your big ticket.

Now go do it.

one thing i have learnt from people in small business is "that mates are to expensive to have" it sounds like a bad thing to say about your mates, but if all your mates ring you up and want you to do work for them on the "pay ya back later" policy, you put yourself behind, you've got fuel costs, maintenance and time consumed you could be charging someone else at full rate, and the last thing you want to be doing is chasing money of people beleive me it is very time consuming, i have been chasing a client oweing thousands to the business i work for for 5 months, their vehicle will be sold at auction if not picked up in january, which means alot of paper work and stuffing around, not to mention getting money out of insurance companies.

my point is dont undercut yourself and put yourself behind, mates jobs for example come well after your clientell aswell as your paperwork. I have found if you get yourself firmly planted, and you put in the hard yards and do jobs properly and don't cut corners are punctual and deliver results by deadlines "word of mouth" can make your business grow wihtout you doing a thing, especially in the industry you want to get into.

I also think you should steer well clear of credit cards, it is too easy to to spend that little bit more and if you start to get behind i found the hard way they are alot harder to get back into control.

well the idea of renting a machine seemed like a good idea so i have been looking into it and its around 300 for half a day or 350-400 for 24hours so i would need to be doing atleast 2days work for me to actually make a bit of money instead of pay to do work but than i still need a truck to get the machine around which is 165 for 4 hours or 195 for 24hours so lets say i hire a machine and truck for 24 hours thats around 600 so i need to earn 600 before i start earning anything im sure that i would be better of buying my own equipment and paying interest for those sort if rates and it would only be worth it if i had a full weekends work so if i had a job for 4hours i would have to knock it back unless i could line up 3 or 4jobs one after anather

as far as getting contract drawn up for work i have done a bit of scouting and its not that easy not without doing quite a bit of work for them first i have spoken to a few people who will be able to get me work though and thats just a start, when i first buy the gear i will be taking it out to a mates property for about 4 weekends to get used to it i can operate but would want to get the knack of my own machine so if i was to hire one than it would cost me 2400 just to practice in 4 weeks repayments would be around 600-900 thats a gap or about 1500-1800 for overheads so unless i have a job lined up and my machine breaks down i cant validate hire i can validate the cost if it saves my name,

i would look at hiring my gear out to other blokes whose machines break down at a rate of say 200 a day which i think would be great as that could go straight into the buisness remembering i wont be putting any of the income into my wallet until i leave my day job

i still have a lot of reasearching to do and would love it if people keep feedback coming good or bad im taking it all in